ICRA Reaffirms Rating for Polaris Liquor Private Limited's Cash Credit Facility

Strategic Insights -

ICRA has reaffirmed the [ICRA]BB (pronounced ICRA double B) rating to Rs. 32.5 crore* (enhanced from Rs. 25.0 crore) Cash Credit facility of Polaris Liquor Private Limited (PLPL) with a stable outlook. The rating reaffirmation takes into account the company's long-standing experience in the liquor trading and allied businesses, established relations with the UB group, and healthy scale of operations. However, the ratings are constrained by the company's stretched financial risk profile, low accruals, moderately high gearing, and vulnerability to government regulations.

Key Takeaways:

  • ICRA has reaffirmed the [ICRA]BB rating to Rs. 32.5 crore Cash Credit facility of Polaris Liquor Private Limited with a stable outlook.
  • The rating reaffirmation takes into account the company's long-standing experience in the liquor trading and allied businesses, established relations with the UB group, and healthy scale of operations.
  • The company's stretched financial risk profile, characterized by low accruals, moderately high gearing, and vulnerability to government regulations, remains a concern.
  • Polaris Liquor Private Limited is engaged in distributorship of the brands of United Breweries Ltd (UBL) and United Spirits Limited (USL) in specified areas of Pune.
  • The company has distribution rights for all brands of UBL and USL, except for three brands: Signature, DSP Blue & Antiquity.
  • Ability to scale up the distributorship business and working capital cycle management remain key sensitivity factors for the company going forward.
  • Mr. Neeraj Rawal promotes Polaris Liquor Private Limited, which is a part of the N. R. group of companies.

Statistics:

  • Rs. 32.5 crore (enhanced from Rs. 25.0 crore) is the amount for which ICRA has reaffirmed the rating.
  • The company has a cash credit facility of Rs. 32.5 crore.
  • Polaris Liquor Private Limited has a long-standing experience of over three decades in the liquor trading and allied businesses.
  • The company operates in the urban areas of Pune, which has a high purchasing power.

Sources:

  • ICRA Limited. "ICRA Reaffirms [ICRA]BB Rating to Rs. 32.5 Crore Cash Credit Facility of Polaris Liquor Private Limited". Retrieved August 2015, from www.icra.in.
  • ICRA Limited. "Rating Action". Retrieved August 2015, from www.icra.in.