CRISIL Ratings has reaffirmed the ratings for Anupam Rasayan India Ltd. (ARIL) and removed them from ‘Rating Watch with Negative Implications.’ This action follows the successful funding of the $150 million acquisition of Jayhawk Fine Chemicals LLC. The long-term rating is Crisil A+/Stable and the short-term rating is Crisil A1. The group’s strong business profile and financial risk profile continue to support the ratings, despite working capital intensity.
Credit Rating Update Announced
Anupam Rasayan India Limited (ARIL) has received an update on its bank loan facility ratings from CRISIL. The ratings have been removed from the ‘Rating Watch with Negative Implications’ status and reaffirmed at the current levels. The decision was driven by the successful completion of the funding pattern for the recent acquisition.
Rating Action Summary
The total bank loan facilities rated amount to Rs. 1369.82 Crore. The revised rating action is summarized as follows:
- Long Term Rating: Crisil A+/Stable (Removed from ‘Rating Watch with Negative Implications’; Rating Reaffirmed)
- Short Term Rating: Crisil A1 (Removed from ‘Rating Watch with Negative Implications’; Rating Reaffirmed)
Rationale for Watch Resolution
The ratings were initially placed on watch following the $150 million acquisition of US-based Jayhawk Fine Chemicals LLC. The resolution of the watch is due to the completion of fundraising, which involved $41 million in debt and $109 million infused as Class B non-voting equity by an investor group. Furthermore, working capital intensity has improved; inventory turnover reduced significantly, with inventory days dropping from 500 days to 310 days in the first nine months of fiscal 2026, aided by revenue growth to Rs 1,729 crore (up from Rs 938 crore in the prior corresponding period).
Key Rating Drivers: Strengths
The group maintains a strong business risk profile, anchored by its established market position in specialty chemicals, integrated operations, and a robust clientele including 31 multinational companies. Revenue diversification is a key strength, with pharmaceutical and polymer segments projected to contribute over 30% of total revenue in fiscal 2026. The strategic acquisition of Tanfac Industries secures critical inputs like hydrogen fluoride, ensuring uninterrupted raw material supply.
Key Rating Drivers: Weaknesses & Financial Profile
The primary weakness remains the working capital intensive business, although the cycle is expected to improve further. Susceptibility to volatility in foreign exchange rates and competition are also noted factors. Financially, the capital structure remains strong, supported by robust operating profitability. The Net worth to Total Outside Liabilities/Adjusted Networth ratio stood at a healthy 0.74 time as of March 31, 2025. Liquidity is supported by expected net cash accruals of Rs 280-350 crore against debt obligations of Rs 40 crore in fiscal 2027.
Outlook and Sensitivities
The outlook is set to Stable, based on expectations of continued performance benefiting from the established brand and comfortable financial risk profile. Upward factors could include working capital efficiency improvements leading to Gross Current Assets (GCAs) declining below 250 days, and sustained margin maintenance above 25%. Downward pressure could arise from operating margins falling below 18% or a sizeable stretch in the working capital cycle causing gearing to rise above 1 time.
Source: BSE
