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MSTC Limited Audit Report / Information 2019
60803_rns_2019-05-15_adf6f267-f077-4d3a-ac24-04296b671884.pdf
Audit Report / Information
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CIN 2 U27320WB1964GOI026211 2250, A.J.C BOSE ROAD, KOLKATA - 700 020, INDIA PHONE : 9163-2290-0964, 2287-9627 I 7557 / 0568 FAX : 2287-8547/2290-721"2281-3089, 2287-4915(ERO) website : www.mstcindia.co.in .www.mstcecommerce.com
MSTC/CS/SE /97 Date: 15/05/2019
- The Dy. Manager (Listing) 2. The Manager, Listing Department BSE Limited National Stock Exchange of India Limited Phiroze Jeejeebhoy Towers, Exchange Plaza, BandraKurla Complex Dalal Street, Mumbai 400 023. Bandra (E), Mumbai 400 051 (Scrip Code: 542597) (Scrip Code: MSTCLTD)
Dear Sir/Madam,
Sub: Disclosure under regulation 30 of SEBI (Listing Obligation & Disclosure reguirements) Regulations 2015
Enclosed please find copy of credit rating for bank facilities issued by Acuite Ratings & Research Limited in relation to various bank facilities availed by the company. There is no change in rating of the company. Copy of the Ratings received from Acuite Ratings & Research Limited is attached for your ready reference.
Kindly treat this as a disclosure under Regulation 30 of SEBI (Listing Obligation & Disclosure Requirement) Regulations, 2015.
Kindly take the same on record.
Thanking You,
Yours faithfully, For MSTC Limited:
(Ajay Kumar Rai) Company Secretary
e-commerce certified as ISO/IEC 270012013 & ISO 9001:2008 - CMMi Level 3Appraised
Press Release
MSTC Limited
May 10,2019
Rating Re-affirmed
| TotalBank FacilitiesRated* | Rs. 5500.00 Cr. | |||
|---|---|---|---|---|
| Long TermRating | ACUITE A+/ OuTlook: SToble | |||
| ShortTermRating | ACUITE Al + |
* Refer Annexurefor details
Rating Rationale
AcuiTé hos re-offirmed long Term roTing of ACUITE A+ (read as ACUITE A plus) ond o shorT Term roTing of ACUITE A1+ (read as ACUITE A one plus) To The Rs. 5500.00 crore bonk fociliTies of MSTC LimiTed (MSTCL) .The ouTlook is 'Stable'.
MSTC IimiTed (formerly known os leeTol Scrop Trode CorporoTion LimiTed) wos incorporoTed in SepTember I964 for exporT of ferrous scrop. The sToTus of The compony underwenT chonge in Februory, I974 To ThoT of o subsidiory of STeel AuThoriTy of Indio LimiTed (SAIL). In l982-83, The corporoTion wos converTed info 0 GovernmenT of Indio (Gol) compony Tronsferring The shores of SAIL To The PresidenT of Indio under odminisTroTive conTrol of lvlinisTry of STeel (MoS). In Morch 2019, Col diluTed 25 per cenT of iTs sToke Through IniTiol Public Offer (IPO) Thereby reducing iTs sToke To 64.75 per cenT os ogoinsT previous sToke of 89.75 per cenT. The core ocTiviTy of The compony is diversified moinly inTo providing e-oucTion/e- procuremenT services ond Troding of bulk producTs like ferrous ond non-ferrous scrop, coke, finished sTeel, cool ond peTroleum producTs.
Ferro Scrop Nigom LimiTed (FSNL) renders cusTodion services for worehouse/sTockyord monogemenT To iTs holding compony (MSTC).
Analytical Approach
AcuiTé hos consolidoTed The business ond finonciol risk profiles of MSTC LTd wiTh iTs wholly owned subsidiory, Ferro Scrop Nigom LTd (FSNL). The consolidoTion is in view of The enTire sToke holding of MSTC in FSNL oporT from operoTionol Iinkoges beTween The Two enTiTies. ExTenT of ConsolidoTion: Full
Key Rating Drivers
Strengths
Established track record and controlling stake of the Government of India
MSTC is 0 Mini RoTno CoTegory I PSU under The odminisTroTive conTrol of The MoS, GovernmenT of lndio. The compony wos iniTiolly seT up in I964 To ocT os o reguloTing ouThoriTy for exporT of ferrous scrop. MSTC become 0 subsidiory of SAIL in I974 ond ceosed To be 0 subsidiory in I982 ond become on independenT compony under The leoS. The Gol currenle hos d 64.75 per cenT sToke in MSTC.
AcuiTé believes ThoT The conTrolling sToke of Col in MSTC would be one of The key roTing sensiTiviTy focTors.
Comfortable financial profile
The finonciol risk profile of The MSTC group is comforToble morked by robusT neTworTh, comforToble georing ond heolThy debT proTecTion meosures. The neTworTh levels of The group sTood of Rs. 729.60 crore os on Morch 3i, 20l8 os ogoinsT Rs. 6286.99 crore in The previous yeor due To The occreTion To reserves. The georing levels hove been of uniTy in The posT Two yeors ended FY' l 8 wiTh The borrowings comprising of only working copiTol IimiTs. The inTeresT coveroge roTio sTood of 2.52 Times in FY'I8 ond NCA/TD sTood of 0.l2 Times in FY'I8.
However, AcuiTé noTices ThoT The compony currenle is focusing on wriTing off of iTs bod dest os o
measure To clean iTs balance sheeT. This has led To deTerioraTion in The operaTing profiTabiliTy levels of The company. During FY 2018-19, The company has made provision for doubeul dest of Rs 493.30 crore Till 301h SepTember'18 (prov). againsT iTs sTreTched receivable.
Healthy scale of operations
The company is among The leading player offering e-aucTion and bulk Trading of raw maTerials in The form of ferrous and non-ferrous scrap, coke, finished sTeel, coal and peTroleum producTs. IT has conducTed over 28,500 aucTions during FY 2018. During FY 2018, if has regisTered Topline of Rs 2265.79 crore as againsT Rs 1742.63 crore in FY 2017, Thereby regisTering a y-o-y growTh of 30 per cenT. Also during FY 2018-19, The company has clocked revenue of Rs 1476.91 crore Till 30Th SepT'2018 (prov).
Weaknesses
Stretched receivables
The company has ouTsTanding debTors of around Rs. 3981.53 crore as on March 31, 2018 as compared To Rs. 3740.88 crore as on March 31, 2017. DebTors over 6 monThs sTood of Rs 1183.46 crore as on March 31, 2018 i.e ~ 30 per cenT of iTs ToTal debTors which is significanle higher. The high debTors posiTion are primarily on accounT of debTors of Rs. 2939.79 crore from Trading operaTions Through faciliTaTor operaTions; around Rs. 707.65 crores pending from several sTeel players such as SPS STeel Rolling lvlills LimiTed, ConcasT STeel & Power LimiTed, Jai Balaji lndusTries LimiTed eTc. In order To clean The balance sheeT, The company has sTarTed To wriTe off iTs receivable. In FY 2018, The company has wriTTen off Rs 459.41 crore. FurTher, during FY 2018-19, The company has made provision for doubeul dest of Rs 493.30 crore againsT iTs sTreTched receivable Till 30Th SepTember' 18 (prov).
AcuiTé believes ThaT The realizaTion of The ouTsTanding debTors would be a key crediT moniTerable going fon/vard.
Liquidity:
The liquidiTy posiTion of The company is healThy marked by neT cash accruals in The range of Rs.90 crore crore during FY 2018 againsT nil debT obligaTions during The same period. The bank balance sTood healThy of Rs 176.85 crore as on 31st lvlarch'18. FurTher, The healThy liquidiTy is reflecTed from 5 per cenT uTilizaTion of iTs fund based limiT of Rs 620 crore for The 11 monTh ended April'2019.
Outlook: Stable
AcuiTé believes ThaT The ouTlook on MSTC will remain sTable over The medium Term on accounT of The company's esTablished Track record and conTrolling sTake of (301. The ouTlook may be revised To 'PosiTive' in case of significanT improvemenT in iTs receivables posiTion. The ouTlook may be revised To 'NegaTive' in case The company fails To increase iTs scale of operaTions or furTher deTerioraTion in iTs receivables posiTion.
| UniT | FY18 (AcTual) | FY17 (AcTual) | FY16 (AcTual) | |
|---|---|---|---|---|
| OperaTing lncome | Rs. Cr. | 2265.79 | 1742.63 | 3225.41 |
| EBITDA | Rs. Cr. | (311,14) | 140.94 | 180.06 |
| PAT | Rs. Cr. | 77.22 | 79.84 | 93.28 |
| EBITDA Margin | (%) | (13,733) | 8.09 | 5.58 |
| PAT Margin | (%) | 3,41 | 4.58 | 2.89 |
| ROCE | (%) | 18.12 | 19.90 | 18.13 |
| ToTal DebT/Tangible NeT WorTh | Times | ('05 | 1.00 | 1.00 |
| PBDlT/lnTeresT | Times | 252 | 2.73 | 2.51 |
| ToTal DebT/PBDIT | Times | 357 | 4.88 | 3.63 |
| Gross CurrenT AsseTs (Days) | Days | 684 | 838 | 380 |
About The Rated EnTiTy - Key Financials
STaTus of non-cooperation wiTh previous CRA (if applicable)
None
Any other information
None
Applicable Criteria
- 0 Default Recognition httDs: //WWW.acuite.in /criteria-defau1t.htm
- Financial Ratios And Adjustments httns: //www.acuite.in /view-ratin2—criteria-20.htm
- Trading Entities- httDs: //www.acuite.in /view-ratin2—criteria-4.htm
- ° Consolidation -httDs://WWW.acuite.in/criteria-consolidationhtm
Note on complexity levels of the rated instrument
httDs: //www.acuite.in/criteria-coleexitV-levels.htm
Rating History (Upto last three years)
| Date | /Name ofInstrumentFacilities | Term | Amount(Rs. Cr.) | Ratings/Outlook |
|---|---|---|---|---|
| Cash Credit | Long Term | 170.00 | ACUITE A+/Stable(A55tgned) | |
| Cdsn CreditOpen | Short term | i50.00 | ACUITE A+/Stable(ASS'gned) | |
| Cdsn Credit | Long term | 200,00 | ACUITE A+/Stable(ASSIgned) | |
| 08—February-2018 | Bill Discounting | Short Term | 488.00 | ACUITE Al +(ASS'gned) |
| Cash Credit | Long Term | 100.00 | ACUITE A+/Stable(A55tgned) | |
| L/C Import/ Inland | Short Term | 400.00 | ACUITE Al +(Asmgned) | |
| Letter ot Credit | Short Term | 400.00 | ACUITE Al +(ASS'gned) | |
| Letter ot Credit | Short Term | 2045.00 | ACUITE Al +(ASSIQHGd) | |
| Letter ot Credit | Short Term | 900.00 | ACUITE Al +(ASS'gned) | |
| Letter ot Credit | Short Term | 230.00 | ACUITE Al +(ASSIQHGd) | |
| Proposed Letter OfCredit | Short Term | 139.00 | ACUITE Al +(A55igned) |
| Leller Of"OwedCredit | Short Term | l94.00 | ACUITE Al +(Assigned) |
|---|---|---|---|
| Leller Of"OwedCredit | Short Term | 84.00 | ACUITE Al +(Assigned) |
*Annexure — Details of instruments rated
| .Name ofthe Fac111t1es | Date ofIssuance | CouponRate | MaturityDate | Size oftheIssue (Rs.Cr.) | Ratings/Outlook |
|---|---|---|---|---|---|
| ,COSh Credll | NOtApplicable | NOtApplicable | NOtApplicable | 170'00 | ACUITE A+/STOble(Re-affirmed) |
| ,CGSh CredllOpen | NOtApplicable | NOtApplicable | NOtApplicable | 150'00 | ACUITE A+/STOble(Re-affirmed) |
| ,C05" Cred" | NolApplicable | NolApplicable | NolApplicable | 200-00 | ACUITE A+/Slable(Re-affirmed) |
| 'SCOU" "'9B." D.T.' | NOTApplicable | NOTApplicable | NOTApplicable | 488-00 | ACUITE Al +(Re-affirmed) |
| ,Cred"C05h | NolApplicable | NolApplicable | NolApplicable | 100.00 | ACUITE A+/Slable(Re-affirmed) |
| "C'mporT/ 'n'ond | NOTApplicable | NOTApplicable | NOTApplicable | 400-00 | ACUITE Al +(Re-affirmed) |
| ,Cred"Leller Of | NOTApplicable | NOTApplicable | NOTApplicable | 400-00 | ACUITE Al +(Re-affirmed) |
| er 0CredlfLe'TTT | NOTApplicable | NOTApplicable | NOTApplicable | 204500 | ACUITE Al +(Re-affirmed) |
| ,Cred"Leller Of | NOTApplicable | NOTApplicable | NOTApplicable | 900-00 | ACUITE Al +(Re-affirmed) |
| ,Cred"er 0fLeTT | NOTApplicable | NOTApplicable | NOTApplicable | 230-00 | ACUITE Al +(Re-affirmed) |
| ,PrOposed Leller OT Cred" | NOTApplicable | NOTApplicable | NOTApplicable | '39-00 | ACUITE Al +(Re-affirmed) |
| ,Proposed Leiier Of Credit | NOTApplicable | NOTApplicable | NOTApplicable | T9400 | ACUITE Al +(Re-affirmed) |
| ,PrOposed Leller OT Cred" | NOTApplicable | NOTApplicable | NOTApplicable | 84-00 | ACUITE Al +(Re-affirmed) |
Contacts
| Analytical | Rating Desk |
|---|---|
| Pooja Ghosh | Varsha Bist |
| Head— Corporate and Infrastructure Sector Ratings | Manager -Rating Desk |
| Tel: 033-66201203 | Tel: 022-67141160 |
| [email protected] | [email protected] |
| Aniruddha Dhar | |
| Rating Analyst | |
| Tel: 033-66201209 | |
| aniruddha.dhar@acuiteratingsin | |
About Acuité Ratings 8; Research:
Acuité Ratings & Research Limited (Erstwhile SMERA Ratings Limited] is a full-service Credit Rating Agency registered with the Securities and Exchange Board of India [SEBI]. The company received RBI Accreditation as an External Credit Assessment Institution [ECAI], for Bank Loan Ratings under BASEL-II norms in the year 2012. Since then, it has assigned more than 6,000 credit ratings to various securities, debt instruments and bank facilities of entities spread across the country and across a Wide cross section ofindustries. It has its Registered and Head Office in Mumbai.
Disclaimer: An Acuité rating does not constitute an audit of the rated entity and should not be treated as a recommendation or opinion that is intended to substitute for afinancial adviser's or investor's independent assessment ofwhether to buy, sell or hold any security. Acuité ratings are based on the data and information provided by the issuer and obtainedfrom other reliable sources. Although reasonable care has been taken to ensure that the data and information is true, Acuité, in particular, makes no representation or warranty, expressed or implied with respect to the adequacy, accuracy or completeness ofthe information relied upon. Acuité is not responsiblefor any errors or omissions and especiallystates thatithas nofinancial liabilitywhatsoeverfor any direct, indirector consequential loss of any kind arising from the use of its ratings. Acuité ratings are subject to a process of surveillance which may lead to a revision in ratings as and when the circumstances so warrant. Please visit our website [www.acuite.in)forthelatestinformation on any instrumentratedbyAcuite'.