Brickwork Ratings reaffirms/revises the ratings for the Bank Loan Facilities of Rs. 200.00 Crs. of Ansal Properties & Infrastructure Ltd
ParticularsFacilities** | Amount (Rs.Crs.) | Tenure | Rating# | ||
---|---|---|---|---|---|
Previous | Present | Previous (31 Dec 2019) |
Present | ||
Non Fund Based | 200.00 | 200.00 | Long Term |
BWR B
/Negative Downgrade |
BWR C
Downgrade |
Grand Total | 200.00 | 200.00 | (Rupees Two Hundred Crores Only) |
Brickwork Ratings (BWR) has revised the rating to BWR C from BWR B-/Negative for the bank loan facilities of Ansal Properties & Infrastructure Limited (APIL).
The rating reflects the poor liquidity position of the company, and weak credit profile marked by widened up net losses during FY-20, slow progress in on-going projects and inadequate debt coverage indicators.
KEY RATING DRIVERSCredit Strengths:
The APIL is promoted by Mr. Sushil Ansal and Mr. Pranav Ansal. The group has completed various residential and commercial real estate projects especially in the NCR region. The management team is highly experienced in the real estate business and hired qualified professionals to manage different projects. The board also includes a required number of independent directors to ensure corporate governance in the company.
Credit Risks:
During FY20, financial risk profile of APIL is marked by weak debt protection metrics such as interest service coverage ratio of 0.58x (FY19:0.52x) and debt service coverage ratio of 0.09x (FY19: 0.17x). Further, during FY20 APIL has reported losses of Rs 203.75 Crs as against Rs 60.19 Crs for FY19. Losses have widened due to impairment of investments and compensation to customers.
At the time of last rating, on an average basis APIL achieved 41.12% completion in on going projects and as per the latest information provided APIL has achieved 42.36% completion in on going projects which is majorly attributed to liquidity constraints and Covid-19 restrictions.
BWR has factored in the standalone business parameters and financial risk profile of the company to arrive at the rating. BWR has applied its rating methodology as detailed in the rating criteria detailed below (hyperlinks provided at the end of this rationale).
RATING SENSITIVITIES
Positive: BWR may revise the ratings upward in the case there is improvement in overall financial risk profile, healthy progress in on going projects and improvement in overall liquidity profile.
Negative: BWR may revise the rating downward in the case there is default in bank guarantee limits.
LIQUIDITY INDICATORS - Poor
For the last few years, Ansal Group has been facing liquidity constraints on account of slow pace of sales in its projects impacting the progress of construction as well. Also, a notable amount of funds is blocked in the form of land bank which the company is not able to monetize. Many of their ongoing projects have not been able to achieve financial closure and thus, lack of required funds is the reason for these projects being stuck. In the absence of bank funding, the company relies heavily on customer advances making it even difficult for them to complete the projects, since, fresh sales are negligible and payments from already sold area are linked with construction. On account of all this, the company’s liquidity position is poor and the same has impacted their ability to service obligations in some of their project loans..
ABOUT THE ENTITYKey Parameters | Units |
FY 19-20 (Audited) |
FY 18-19 (Audited) |
---|---|---|---|
Operating Revenue | Rs.Crs. | 794.38 | 613.58 |
EBITDA | Rs.Crs. | 145.46 | 66.04 |
PAT | Rs.Crs. | -203.75 | -60.19 |
Tangible Net Worth | Rs.Crs. | 209.62 | 423.04 |
Total Debt/Tangible Net Worth | Times | 1.97 | 1.11 |
Current Ratio | Times | 0.87 | 0.90 |
NA
CARE has migrated the rating of APIL to BWR D issuer non cooperation category on 24 June 2020.
RATING HISTORY FOR THE PREVIOUS THREE YEARS (including withdrawal and suspended)Facilities | Current Rating (2021) | 2020 | 2019 | 2018 | |||||
---|---|---|---|---|---|---|---|---|---|
Type | Tenure | Amount (Rs.Crs.) |
Rating | Date | Rating | Date | Rating | Date | Rating |
Fund Based | LT | NA |
NA
|
NA |
NA
|
NA |
NA
|
26Jun2018 |
BWR BB-(SO)/Stable
|
Non Fund Based | LT | 200.00 |
BWR C
|
NA |
NA
|
31Dec2019 |
BWR B/Negative
|
26Jun2018 |
BWR B/negative
|
Grand Total | 200.00 | (Rupees Two Hundred Crores Only) |
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 CriteriaAnalytical Contacts | |
---|---|
Akhil Khurana Ratings Analyst Board : +91 11 2341 2232 akhil.k@brickworkratings.com |
Tanu Sharma Director - Ratings tanusharma@brickworkratings.com |
1-860-425-2742 | media@brickworkratings.com |
SL.No. | Type Of Facilities | Long Term(Rs.Crs.) | Short Term(Rs.Crs.) | Total(Rs.Crs.) | ||
---|---|---|---|---|---|---|
1 | Bank GuaranteeSanctioned | 200.00 | _ | 200.00 | ||
Total | 200.00 | 0.00 | 200.00 | |||
TOTAL (Rupees Two Hundred Crores Only) |
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About Brickwork RatingsBrickwork 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 11,400 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. BWR has its corporate office in Bengaluru and a country-wide presence with its offices in Ahmedabad, Chandigarh, Chennai, Hyderabad, Kolkata, Mumbai and New Delhi along with representatives in 150+ locations.
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