India Ratings assigns, IND BBB, an Investment Grade Credit Rating to Pioneer Embroideries Limited

Pioneer embrodries Ltd plant at Himachal Pradesh

Fund-based Working Capital Limits of Rs. 20.00 crore; Rating IND BBB/Stable/ IND A3+

Non fund-based Working Capital Limits of Rs 1.33 crore: Rating IND A3+

Term Loan facilities of Rs. 9.54 crore; Rating IND BBB/Stable

Mumbai (Maharashtra) [India], May 2: India Ratings has assigned a Long Term Issuer Rating of IND BBB, with a Stable Outlook, to Pioneer Embroideries Limited (PEL). IND BBB/Stable rating reflects moderate safety and moderate credit risk. This marks the reinstatement of an Investment Grade Rating for the Company after a long gap. PEL has a presence in two business verticals, namely, Specialised Polyester Filament Yarn (SPFY), where it owns the brand “SILKOLITE” and Embroidered and Laces (E&L), which also includes the iconic “HAKOBA” brand.

The new rating is for debt facilities amounting to Rs. 30.87 crores and exhibits a more robust credit profile as against the current credit rating of CARE BB+. India Ratings noted the improvement in the operational and financial performance of the Company for FY22. The agency expects the credit metrics to remain stable in the near term.

Commenting on the rating upgrade, Mr Deepak Sipani, CFO, Pioneer Embroideries Limited, said, “The Long Term Issuer Rating of BBB/ Stable for us is a result of a steadily-improving operational performance and deleveraging efforts undertaken in recent years. PEL has successfully navigated the tough period, including the pandemic, and is now set to further improve its revenues and profitability with the planned capacity expansion in value-added products.”

Established in 1991 by Mr Raj Kumar Sekhani, Pioneer Embroideries Limited (“PEL”) is one of India’s notable manufacturers and exporters of value-added Specialized Polyester Filament Yarn and Embroidery & Laces. It has a state-of-the-art SPFY manufacturing facility in Himachal Pradesh and three Embroidery & Laces manufacturing facilities in Gujarat, Dadra & Nagar Haveli and Tamil Nadu.

PEL has carved a permanent niche in the SPFY business worldwide within a few years, with best-in-class quality under the SILKOLITE brand. PEL has a yarn capacity of about 18,000 MT pa, which is being expanded to 26,000 MT pa. PEL’s products find application mainly in the non-apparel segment, used in carpets, bath mats, upholstery fabrics, and curtains. Thus, PEL is one of the first textile companies to create a brand in a highly commoditized yarn business.

PEL has a capacity of around 14 mm meters for laces and about 1,700 mn stitches of embroidery. PEL’s products enjoy a premium in the marketplace because of better quality, design, and capacity. Owners of the heritage brand – Hakoba – PEL have added strength to the brand by building upon an extensive library of embroidery designs, making Hakoba synonymous with high-quality embroidery across the world. At present, the Company has three embroidery and lace manufacturing facilities at – Coimbatore (Tamil Naidu), Naroli (UT DN & H) and Sarigam (Gujarat), along with a comprehensive marketing presence in all the major markets. Its Coimbatore facility is certified as per GOTS (Global Organic Textile Standard), an internationally recognized standard.