RATING RATIONALE
03Mar2021

Rajshree Educational Trust

Brickwork Ratings revises the ratings for the Bank Loan Facilities of Rs.65.46 Crs. of Rajshree Educational Trust

Particulars
Facilities** Amount (Rs.Crs.) Tenure Rating#
Previous Present Previous(23 Apr 2020) Present
Fund Based
Term Loan Out-standing 86.15 65.46 Long Term BWR BBB - /Stable Reaffirmation BWR BBB /Stable Upgrade
Over Draft Out-standing 05.00 00.00
Sub Total 91.15 65.46
Grand Total 91.15 65.46 (Rupees Sixty Five Crores and Forty Six lakhs 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


RATING ACTION / OUTLOOK

Upgrade in the ratings of bank loans availed by Rajshree Educational Trust (RET or the Trust) factors in growth in operating receipts and comfortable gearing besides debt coverage indicators. MCI approval for MBBS course for an elongated period of five years and sanction of 45 post graduate (PG) seats reduces business risks for the Trust, and supports the rating upgrade. The Trust proposes to enhance MBBS and PG intake by another 100 seats and 12 seats per year respectively, giving a good revenue visibility in the medium term.

BWR expects the Trust to improve its operating receipts and overall financial risk profile as indicated by interest coverage and financial leverage going forward. Liquidity in the Trust is expected to remain adequate during the medium term.

The rating is, however, constrained by decline in surplus margins during FY20, business concentration and regulatory risks.

Outlook: Stable

BWR believes that Rajshree Educational Trust.'s business risk profile will be maintained over the medium term. The ‘Stable’ outlook indicates a low likelihood of rating change over the medium term.

KEY RATING DRIVERS


Credit Strengths:


Credit Risks:

ANALYTICAL APPROACH - Standalone

For arriving at its ratings, BWR has applied its rating methodology on a standalone basis as detailed in the Rating Criteria detailed below (hyperlinks provided at the end of this rationale).

RATING SENSITIVITIES

Upward: Improvement in operating income, surplus margins and corpus fund would support upward rating action.

Downward: Any further withdrawal from corpus fund and deterioration in surplus margins and debt coverage indicators would attract adverse rating action.

COVID 19 impact: Due to inherent nature of the operations of the trust, business and revenue streams were particularly immune to COVID 19 impact. The Trust did not avail 6M moratorium on loans and also did not avail any emergency line of funding. No OTR (One Time Restructuring) in respect of bank loans facilities is proposed.

LIQUIDITY INDICATORS - Adequate

With cash accrual of Rs.38.44 crs during FY20, the Trust was comfortably placed in servicing TL repayment obligations of Rs.16.44 crs during FY20. During FY21 and FY22, cash accruals of Rs.40.74 crs and Rs.39.81 crs are expected against TL repayment obligations of Rs.19.51 crs and Rs.20.25 crs respectively.

ABOUT THE ENTITY

Rajshree Educational Trust was formed in 2008 and registered vide registration number 316 on 01st Sept. 2009 as a Public Charitable Trust. It has been running educational institutes in Bareilly since 2009. RET was founded by Smt. Krishna Kumari to promote education and research in the field of Engineering, Technology, Medicine, Management, Humanities and Sciences. Registered office of RET is at B-65, Ekta Nagar, Bareilly, UP. Rajendra Kumar Agarwal (President), Monika Agarwal (Vice-President) and Rakesh K Agarwal (Secretary) are the promoters of the society. Piyush Gupta (Treasurer), Rajesh Agarwal, Manu Agarwal and Ajay Agarwal are the other members of RET.

KEY FINANCIAL INDICATORS (Standalone)
Key Parameters Units FY 19-20
(Audited)
FY 18-19
(Audited)
Operating Revenue Rs.Crs. 108.97 98.35
EBITDA Rs.Crs. 48.72 50.65
PAT Rs.Crs. 16.62 24.91
Tangible Net Worth Rs.Crs. 129.09 138.35
Total Debt/Tangible Net Worth Times 0.76 0.82
Current Ratio Times 1.52 1.47
KEY FINANCIAL INDICATORS (C.E)-
Key Parameters Units

Operating Revenue Rs.Crs. Not Available Not Available
EBITDA Rs.Crs. Not Available Not Available
PAT Rs.Crs. Not Available Not Available
Tangible Net Worth Rs.Crs. Not Available Not Available
Total Debt/Tangible Net Worth Times Not Available Not Available
Current Ratio Times Not Available Not Available
KEY COVENANTS OF THE FACILITY RATED

NIL


STATUS OF NON-COOPERATION WITH PREVIOUS CRA

NIL

ANY OTHER INFORMATION

NIL

RATING HISTORY FOR THE PREVIOUS THREE YEARS (including withdrawal and suspended)
Facilities Current Rating  (2021) Rating History (2020)
Type Tenure Amount Rating 23Apr2020
Fund Based
Term Loan - Out-standing
Over Draft - Out-standing
Long Term 65.46
00.00
BWR BBB/Stable BWR BBB -/Stable
Grand Total 65.46 (Rupees Sixty Five Crores and Forty Six lakhs Only)

Facilities Current Rating  (2021) Rating History (2019)
Type Tenure Amount Rating 30Mar2019 28Jan2019
Fund Based
Term Loan - Out-standing
Over Draft - Out-standing
Long Term 65.46
00.00
BWR BBB/Stable BWR BBB -/Stable BWR B - (Stable) (Withdrawn)
Grand Total 65.46 (Rupees Sixty Five Crores and Forty Six lakhs Only)

Facilities Current Rating  (2021) Rating History (2018)
Type Tenure Amount Rating NA
Fund Based
Term Loan - Out-standing
Over Draft - Out-standing
Long Term 65.46
00.00
BWR BBB/Stable NA
Grand Total 65.46 (Rupees Sixty Five Crores and Forty Six lakhs 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.

Analytical Contacts

Saurabh Agarwal

Assistant Manager - Ratings Board : +91 11 2341 2232 saurabh.a@brickworkratings.com

Ashwini Mital

Director - Ratings Board : +91 172 5032 295 / 6 ashwinimital@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com
Rajshree Educational Trust
ANNEXURE-I
Details of Bank Facilities rated by BWR
SL.No. Type Of Facilities Long Term(Rs.Crs.) Short Term(Rs.Crs.) Total(Rs.Crs.)
1 Term LoanOut-standing 65.46 _ 65.46
2 Over DraftOut-standing _ _ 0.00
Total 65.46 0.00 65.46
TOTAL (Rupees Sixty Five Crores and Forty Six lakhs Only)
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