RATING RATIONALE
30Apr2024

RKEC Projects Ltd

Brickwork Ratings downgrades the ratings for the Bank Loan Facilities of Rs. 300.00 Crs. of RKEC Projects Ltd based on best available information, as the issuer did not cooperate.

Particulars
Facilities** Amount (Rs.Crs.) Tenure Rating#
Previous Present Previous
(30 Jan 2023)
Present
Fund Based 63.00 63.00 Long Term BWR BB+/Stable
ISSUER NOT COOPERATING* /Downgrade
BWR BB /Stable
Continues to be in ISSUER NOT COOPERATING* category/Downgraded
Non Fund Based 237.00 237.00 Short Term BWR A4+
ISSUER NOT COOPERATING* /Downgrade
BWR A4
Continues to be in ISSUER NOT COOPERATING* category/Downgraded
(50.00) (50.00)
Grand Total 300.00 300.00 (Rupees Three Hundred Crores Only)
#Please refer to BWR website www.brickworkratings.com for definition of the ratings
**Details of Bank Loan facilities,consolidation or instruments are provided in Annexure
*Issuer did not cooperate; based on best available information.


RATING ACTION / OUTLOOK / NATURE OF NON-COOPERATION

The rating was due for review in Jan 2024. BWR took up the matter with the issuer to provide the required information over emails and through telephone calls. Despite the best efforts of Brickwork Ratings to get the minimum required information for a review through emails and through telephone calls, the entity has not provided the same. BWR also tried to get in touch with the banker for feedback on the account over emails however no response was received. In the absence of adequate information from the company, BWR is unable to assess the company’s financial performance and its ability to service its debt and maintain a valid rating.
 
In view of the non-availability of information and lack of cooperation from RKEC Projects Ltd,  Brickwork Ratings has downgrades the long term rating to ‘BWR BB/Stable’ and the short term rating to 'BWR A4'  along with the continuation of the rating in the “Issuer Not Cooperating” category, based on best available information as the Issuer did not cooperate.   
 
The lenders/investors may note to exercise due caution while using the above rating which mentions "ISSUER NOT COOPERATING" since the rating lacks any projections or forward looking component as it is arrived based on the best available information without any management/banker's interaction.

LIMITATIONS OF THE RATING

Information availability risk is a key factor in the assessment of credit risk as generally, non-cooperation by the rated entities to provide the required information for a review of the assigned rating may also be accompanied by financial stress. Users of the credit rating should therefore take into account the possible deterioration in the credit quality of the rated entity arising from its non- transparency and withholding of the information required for a review of the rating.

ABOUT THE ENTITY
Macro Economic Indicator Sector Industry Basic Industry
Industrials Construction Construction Civil Construction

RKEC Projects Limited, an NSE listed company, was incorporated in April 2005 as a private limited company, at Visakhapatnam, Andhra Pradesh. Subsequently, in 2016, the company was converted into a public limited company and listed on NSE in 2017. RKEC is an enlisted contractor with the Ministry of Defence as ‘Super Special Class’ civil contractor for Military Engineering Services [MES], ‘S-02’ contractor for Director General Navy Projects [DGNP] to undertake Civil engineering works, Electrical engineering works and Miscellaneous contracts, ‘Civil category CIV-IV class’ for Defence Research Development Organisation [DRDO]. It is also registered as ‘Special Class - Civil’ contractor for R&B Department, Government of Andhra Pradesh and ‘Super Class’ civil contractor for Public Works Department, Government of Odisha.

Shri G Radhakrishna is the Chairman & Managing Director. Smt G Parvathi Devi, Shri G Venkata Ram Mohan, Dr G Sita Ratnam, Vice Admiral Satish Soni [Retd.], Shri T. Lucas Peter, Brig. J K Rao and Lt Gen P R Kumar (Retd.) are the other directors.

Note: As per information available in Jan 2023.

KEY FINANCIAL INDICATORS

Please refer to the following link for the previous detailed rationale that captures the Key Financials Drivers and their Description, Liquidity Position. Rating Sensitivities, Key Financial Indicators. View Previous Document

STATUS OF NON-COOPERATION WITH PREVIOUS CRA

ANY OTHER INFORMATION

NIL

RATING HISTORY FOR THE PREVIOUS THREE YEARS (including withdrawal and suspended)
Facilities Current Rating  (2024) 2023 2022 2021
Type Tenure Amount
(Rs.Crs.)
Rating Date Rating Date Rating Date Rating
Fund Based LT 63.00
BWR BB/Stable
(Continues to be in ISSUER NOT COOPERATING* category/Downgraded)
30Jan2023
BWR BB+Stable
(ISSUER NOT COOPERATING* /Downgrade)
NA
NA
08Nov2021
BWR BBBStable
(Reaffirmation)
Non Fund Based ST 237.00
BWR A4+
(Continues to be in ISSUER NOT COOPERATING* category/Downgraded)
30Jan2023
BWR A4+
(ISSUER NOT COOPERATING* /Downgrade)
NA
NA
08Nov2021
BWR A2
(Reaffirmation)
NFB SubLimit ST (50.00)
BWR A4+
(Continues to be in ISSUER NOT COOPERATING* category/Downgraded)
30Jan2023
BWR A4+
(ISSUER NOT COOPERATING* /Downgrade)
NA
NA
08Nov2021
BWR A2
(Reaffirmation)
Grand Total 300.00 (Rupees Three Hundred Crores Only)
COMPLEXITY LEVELS OF THE INSTRUMENTS - Simple

BWR complexity levels are meant for educating investors. The BWR complexity levels are available at www.brickworkratings.com / download / ComplexityLevels.pdf. Investors queries can be sent to info@brickworkratings.com.

Hyperlink/Reference to applicable Criteria
Analytical Contacts

Varsha Jasmin

Rating Analyst varsha.j@brickworkratings.com

Nagaraj K

Director - Ratings Board : +91 80 4040 9940 nagaraj.ks@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com
RKEC Projects Ltd
ANNEXURE-I
Details of Bank Facilities rated by BWR
SL.No. Name of the Bank/Lender Type Of Facilities Long Term(Rs.Crs.) Short Term(Rs.Crs.) Total(Rs.Crs.)
1 Bandhan Bank Cash CreditSanctioned 13.00 _ 13.00
2 Bandhan Bank Bank GuaranteeSanctioned _ 7.00 7.00
3 Bank of Baroda Bank GuaranteeSanctioned _ 210.00 210.00
Sub-Limit (Letter of Credit (ILC/FLC)) Sanctioned (50.00)
4 Bank of Baroda Bank GuaranteeProposed _ 20.00 20.00
5 Bank of Baroda Cash CreditSanctioned 37.50 _ 37.50
6 Bank of Baroda Cash CreditProposed 12.50 _ 12.50
Total 63.00 237.00 300.00
TOTAL (Rupees Three Hundred Crores Only)
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About Brickwork Ratings

Brickwork Ratings (BWR), a Securities and Exchange Board of India [SEBI] registered Credit Rating Agency and accredited by Reserve Bank of India [RBI], offers credit ratings of Bank Loan, Non- convertible / convertible / partially convertible debentures and other capital market instruments and bonds, Commercial Paper, perpetual bonds, asset-backed and mortgage-backed securities, partial guarantees and other structured / credit enhanced debt instruments, Security Receipts, Securitization Products, Municipal Bonds, etc. BWR has rated over 11,560 medium and large corporates and financial institutions’ instruments. BWR has also rated NGOs, Educational Institutions, Hospitals, Real Estate Developers, Urban Local Bodies and Municipal Corporations. BWR has Canara Bank, a leading public sector bank, as one of the promoters and strategic partner.

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