RATING RATIONALE
20Apr2021

Assotech Realty Pvt Ltd

Brickwork Ratings reaffirms the ratings for the Bank Loan Facilities of Rs. 145.00 Crs. of Assotech Realty Pvt Ltd

Particulars
Facilities** Amount (Rs.Crs.) Tenure Rating#
Previous Present Previous
(14 Mar 2020)
Present
Fund Based 145.00 145.00 Long Term BWR BBB- (Stable)
Reaffirmation
BWR BBB - /Stable
Reaffirmation
Grand Total 145.00 145.00 (Rupees One Hundred Forty Five 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


RATING ACTION / OUTLOOK

Reaffirmation in the rating of bank loans facilities of Assotech Realty Pvt Ltd (ARPL or the company) factors in experience of promoters, established track record of operations of the company and satisfactory progress of its civil construction projects. Overall financial risk profile of the company is moderate with a stable and comfortable debt structure. During FY20 and FY21, the company has been able to generate adequate cash flows to support construction expenses, loan repayments, assured return payments and other overheads. As the company has not proposed any additional debt for the next 12 months, overall debt structure is expected to improve with repayment of the existing debt. The company is expected to generate adequate cash flows to meet construction and overhead expenses and term debt obligations.

The ratings are, however, constrained by high reliance on customer advances to fund the project costs, high competition in the commercial real estate and other business risks associated with the operations of the company.

Outlook: Stable

BWR believes that Assotech Realty Pvt Ltd.'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: Rating is sensitive to adequacy of cash flows given company expects to meet the project related and other financial expenses from sale of unsold units and realisation of receivables from sold units. Improvements in cash flows and sale position would support upward rating action.

Downward: Not completing the project within the stipulated timelines and any difficulty in generating net cash flows would result in adverse liquidity situations in the company and attract a downward rating action.

LIQUIDITY INDICATORS - Adequate

Liquidity in the company is adequate with cash flow DSCR at approx. 1x during FY21 with the company utilising opening cash balances of Rs.3.38 crs and COVID 19 emergency line of funding of Rs.19 crs (disbursed amount) to meet cash flow mismatches. The company availed 6M moratorium on interest and loan repayments to ease out cash flows during COVID 19 led cash flow disruptions. During FY22, cash flow DSCR is expected to be around 1.36x with healthy expected cash generation from realisation of sale receivables, sale of unsold space, drawings from undisbursed loans and revenues from Sandal Suites and IndiaMart. Remaining project cost of Rs.57 crs is proposed to be met entirely through customer advances.

ABOUT THE ENTITY

ARPL is a Delhi based real estate developer. The company was incorporated as Sampada Realty Pvt Ltd. in December 2002 and was later renamed as ARPL in December 2003. The company has already executed and delivered more than 6 million sq. ft of residential, commercial and service apartments. Completed projects include Windsor Park Indirapuram, Cabana Serviced Residences Indirapuram, Springfields Greater Noida and Assotech Business Cresterra Phase 1 in Noida. The company is promoted by Neeraj Gulati and Umesh Nagpal. Both have combined shareholding of 27.60% as on 02 Feb 2021 in the company. Salil Kumar is the other director in the company.

KEY FINANCIAL INDICATORS (Standalone)
Key Parameters Units FY 19-20
(Audited)
FY 18-19
(Audited)
Operating Revenue Rs.Crs. 188.32 135.85
EBITDA Rs.Crs. 14.88 13.98
PAT Rs.Crs. -0.31 2.77
Tangible Net Worth Rs.Crs. 70.28 69.21
Total Debt/Tangible Net Worth Times 2.10 1.99
Current Ratio Times 3.74 1.69
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) 2020 2019 2018
Type Tenure Amount
(Rs.Crs.)
Rating Date Rating Date Rating Date Rating
Fund Based LT 145.00
BWR BBB-/Stable
14Mar2020
BWR BBB- (Stable)
11Feb2019
BWR BBB- (Stable)
NA
NA
Grand Total 145.00 (Rupees One Hundred Forty Five Crores Only)
Rating Advisory, as on 12Mar2021
Press Release, as on 12Mar2021
Advisory issued for delay in Review of the Rating.

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

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
Assotech Realty Pvt Ltd
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 LoanSanctioned 62.55 _ 62.55
2 GECLSanctioned 9.39 _ 9.39
3 COVID Funded Interest Term LoanSanctioned 4.12 _ 4.12
4 Term LoanSanctioned 59.30 _ 59.30
5 GECLSanctioned 9.64 _ 9.64
Total 145.00 0.00 145.00
TOTAL (Rupees One Hundred Forty Five Crores Only)
ANNEXURE-II
INSTRUMENT DETAILS

InstrumentIssue DateAmount (Rs.Crs)Coupon Rate (%)Maturity DateISIN Particulars
N.A 0

ANNEXURE-III
List of entities consolidated

Name of Entity% OwnershipExtent of consolidationRationale for consolidation
NIL

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