Anupam Rasayan ratings placed on watch negative amid acquisition plan

Anupam Rasayan India Limited has received updated credit ratings from Crisil Ratings Limited and India Ratings and Research (Ind-Ra), both placing the company's long-term and short-term ratings on 'Watch Negative'. This follows its proposed acquisition of Jayhawk Fine Chemicals LLC for $150m. Crisil assigned a 'Crisil A+/Watch Negative' for long-term facilities and 'Crisil A1/Watch Negative' for short-term facilities. Ind-Ra assigned 'IND AA-/Rating Watch with Negative Implications' for long-term issuer and bank loan facilities, and 'IND A1+/Rating Watch with Negative Implications' for short-term bank loan facilities.

The negative watch stems from concerns regarding the funding structure of the acquisition, which may include a mix of debt and equity. This could elevate ARIL's net adjusted leverage, which already increased to 1.7x as of 1HFYE26, dependent on funding structure. Both agencies highlight the stretched working capital cycle, with gross current assets (GCAs) at around 646 days as of March 2025 according to Crisil, and net working capital elevated at around 68% at end-1HFY26 by Ind-Ra.

ARIL's management anticipates funding $40m of the acquisition from internal accruals and/or standalone debt, with the remaining $110m through Class B non-voting shares. Both agencies will resolve the watch upon receiving clarity on the final funding terms and the resultant capital structure, which will critically influence ARIL's leverage and liquidity profiles.