ICRA has downgraded Long Term Rating whereas reaffirmed short term rating
https://www.icra.in/Rationale/ShowRationaleReport/?Id=115015
Some important snippets
Stelis had Sputnik vaccine inventory of 23 million doses (costing ~Rs. 280.0 crore) with a limited shelf life till March 2023. While Stelis is in discussions with Russia’s sovereign wealth fund, RDIF and the marketing partner, ENSO Healthcare LLP to liquidate the stocks, high uncertainty continues to prevail around the same. In the worst-case scenario, Stelis may have to resort to writing off the vaccine inventory, if the same is not liquidated within its shelf life.
Stelis needs to repay the working capital loan in Q4 FY2023 in addition to the scheduled repayments of its term loans, resulting in total principal repayment of Rs. 584.0 crore in FY2023. ICRA notes Stelis’ latest equity raise of USD 155 million, of which USD 90 million was received over FY2021 and FY2022, and Rs. 213.3 crore was received during April-August 2022, which was utilized for partially funding the vaccine project and debt repayment obligations. Further, the balance committed equity of Rs. 271.8 crore is expected to be received soon for meeting the upcoming repayment obligations as well as funding operating losses. In addition, Stelis has plans to raise further equity by Q4 FY2023 to support its business operations and fund its repayment obligations. However, given the current uncertainty in receipt of cash flows from the Sputnik vaccine and the nascent stages of its CDMO business, the timing of further equity raise to meet its sizeable debt repayment commitments remains extremely critical. Any delay in the same could weigh in on Strides’ cash flows as majority portion of Stelis’ term debt is backed by a corporate guarantee from Strides.
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