Ashwani Gupta as a proprietorship concern named Multicolor Projects, MIPL
was reconstituted as a private limited company in 2001.
The downgrade reflects current delays by MIPL in servicing of its debt obligations; the delays have been caused by delays in implementation of MIPL's thermo-mechanically-treated (TMT) rods expansion project and weak liquidity.
MIPL has a weak financial risk profile marked by weak debt protection metrics and a small scale of operations; it is also exposed to intense competition in the steel industry.
This is because CRISIL does not expect funds to be fungible between two entities as trading activity in MIPL has been discontinued from April 2010, and inter-company transactions are carried out at arm's length.
MIPL is a 'one star' export house having presence in more than 24 countries across the globe.
During FY10 (Provisional), MIPL reported a total operating income of Rs.
The rating favourably considers the business and financial support available to MIPL from its ultimate parent, Mosaic Co (NYSE:MOS), the strategic importance of MIPL to the parent due to India being a key market for Di ammonium Phosphate (DAP), steady demand growth prospects for DAP and rising import dependence in India.
ICRA also notes that the bank facilities of MIPL are guaranteed by Mosaic.