News Stocks CRISIL Reaffirms Tilaknagar Industries' A- Rating Following Imperial Blue Acquisition ClarityCRISIL Reaffirms Tilaknagar Industries' A- Rating Following Imperial Blue Acquisition Clarity
CRISIL Ratings reaffirmed Tilaknagar Industries' long-term rating at 'Crisil A-/Stable' and removed it from Rating Watch following clarity on the Imperial Blue acquisition. The total rated facilities increased to ₹2,850 crore from ₹200 crore. The acquisition is expected to triple the company's scale and transform it into a pan-India player, though some financial metrics may moderate due to increased debt levels.
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Tilaknagar Industries Ltd has received a rating reaffirmation from CRISIL Ratings Limited, with its long-term bank loan facilities rating maintained at 'Crisil A-/Stable' and removed from 'Rating Watch with Developing Implications' as of December 30, 2025. The rating action follows the receipt of critical information and clarity around key aspects of the Imperial Blue acquisition, including financials, synergies, and future business outlook.
Rating Enhancement and Key Details
The rating reaffirmation comes with a significant enhancement in the total bank loan facilities rated, reflecting the company's expanded operations post-acquisition.
| Parameter: | Details |
|---|---|
| Total Bank Loan Facilities Rated: | ₹2,850 crore (enhanced from ₹200 crore) |
| Long-term Rating: | Crisil A-/Stable (reaffirmed; removed from Rating Watch) |
| Rating Date: | December 30, 2025 |
Imperial Blue Acquisition Impact
CRISIL Ratings believes the acquisition will substantially strengthen TIL's business risk profile through expected tripling of scale and reduced geographical concentration. The company, which currently derives 86% of its volume from South India, is expected to transition into a pan-India IMFL player. The acquisition was funded through an equal mix of debt (term debt of ₹2,100 crore) and equity (₹2,093 crore), with additional working capital limits of ₹345 crore sanctioned.
Financial Metrics and Projections
While the acquisition is expected to strengthen the business profile, CRISIL anticipates some moderation in financial metrics due to increased debt levels and interest expenses.
| Financial Metric: | Fiscal 2025 | Expected Range (Fiscal 2026-2028) |
|---|---|---|
| Adjusted Interest Cover: | 22.00 times | 2.8-2.9 times |
| Debt to EBITDA: | 0.17 times | 3.5-3.7 times |
| Adjusted Gearing: | Below 1 time | Below 1 time (next two fiscals) |
| TOL/TNW Ratio: | - | 1.0-1.3 times (next two fiscals) |
Business Strengths and Market Position
TIL enjoys a leadership position in the brandy segment with nearly 25% market share in the IMFL industry, excluding Tamil Nadu. Within the prestige and above segment, the company holds around 30% market share. The acquisition of Imperial Blue is expected to diversify the product portfolio, reducing the current heavy reliance on brandy which accounted for 94% of volume in fiscal 2025.
Liquidity and Cash Position
The company's liquidity position has strengthened significantly following recent fundraising activities. During the recent quarter, TIL raised ₹986 crore from preferential issue, resulting in cash and cash equivalents increasing to ₹1,125 crore as of September 30, 2025, compared to ₹103 crore as of March 31, 2025. Bank limit utilization remained low at approximately 19% in the 12 months ended November 2025.
Outlook and Rating Sensitivity
CRISIL maintains a stable outlook, expecting TIL's business risk profile to improve over the medium term supported by substantial increase in scale of operations. The rating agency expects the company to generate net cash accrual of ₹350-550 crore over the medium term, sufficient to meet repayment obligations and capital expenditure requirements. Operating margins may witness some moderation due to Imperial Blue's lower profitability, but cash generation is expected to remain strong.
Historical Stock Returns for Tilaknagar Industries
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -0.76% | -0.14% | +3.00% | -4.69% | +61.03% | +1,564.14% |
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