Brickwork Ratings has reaffirmed the ratings for the Bank Loan Facilities of Rs. 2.63 Crs. of Reliance Infrastructure Ltd
Particulars
Facilities**
Amount (Rs.Crs.)
Tenure
Rating#
Previous
Present
Previous (02 Aug 2023)
Present
Fund Based
82.61
2.63
Long Term
BWR D
removal from ISSUER NOT COOPERATING* category/Reaffirmed
BWR D
Reaffirmation
Grand Total
82.61
2.63
(Rupees Two Crores and Sixty Three 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
BWR has reaffirmed the bank loan ratings at BWR D. As per feedback received from the lender (Canara Bank), Reliance Infrastructure Limited (Reliance Infra) has repaid its term loan obligation. However, the reconciliation process with the bank is under process and the bank is yet to issue a No Due Certificate (NDC) to the company for repayment of debt.
KEY RATING DRIVERS
Credit Strengths:
Experienced promoters: :
Reliance Infrastructure Limited (Reliance Infra) is the flagship company of the Reliance ADA Group, promoted by Mr. Anil D. Ambani. The company operates in the Engineering and Construction (E&C) sector, focusing on power, roads, metro, and other infrastructure projects. It has completed numerous EPC projects and currently manages power distribution companies in Delhi, along with various ongoing road projects.
Diversified business portfolio :
Reliance Infrastructure Limited (Reliance Infra) has a diversified EPC (Engineering, Procurement, and Construction) sector, and executes turnkey contracts for coal-based thermal projects, gas-based power projects, metro systems, railways, and road infrastructure across India. The E&C Division has a total order book position of Rs. 1,957 crore as on March 31, 2024. R-Infra operates two subsidiary companies: BSES Rajdhani, which supplies power to South and West Delhi, and BSES Yamuna, serving East and Central Delhi. Additionally, the company owns toll road assets across India, most of which have been completed. However, some of these projects are currently facing defaults due to delays in loan repayments.
Credit Risks:
Debt Servicing Obligations: :
BWR notes that the company has repaid the majority of the outstanding rated debt during Sept 2024. Reliance Infra has repaid its term loan obligation rated by BWR. However, the reconciliation process with the bank is under process and the bank has yet to issue a No Due Certificate (NDC) to the company. However, some subsidiaries have reported delays in meeting debt obligations, as reflected in the Annual Report for March 31, 2024, and the Q1FY2025 report.
ANALYTICAL APPROACH - Consolidated
BWR has adopted a consolidated approach to assess the company's operational and financial performance, considering the promoters' contributions and all current business segments in determining the rating. The ratings were derived using BWR's established rating methodology, as outlined in the Rating Criteria provided at the end of the presentation.
RATING SENSITIVITIES
Positive:
Track record of timely servicing of its debt obligations for at least a couple of quarters might lead to a positive rating action.
LIQUIDITY INDICATORS - Poor
At the consolidated level, liquidity remains poor. As on March 31, 2024, the company holds cash and cash equivalents totaling Rs.2,081.27 crore, an EBITDA of Rs. 2,162.36 crore, and net cash accruals of Rs. 385.86 crore. Against this, Reliance Infra has an annual interest commitment of around Rs. 2,310.07 crore and the current portion of long-term debt, totaling ₹3,949.54 crore reflecting insufficiency of internal resources to meet debt servicing obligations. The company's debt coverage ratios reflect a concerning financial position, highlighted by a low-interest Coverage Ratio (ICR) of 0.94 times and a Debt Service Coverage Ratio (DSCR) of 0.38 times.
ABOUT THE ENTITY
Macro Economic Indicator
Sector
Industry
Basic Industry
Utilities
Power
Power
Power Distribution
R-Infra is the group's flagship company (the Reliance ADAG group) and is promoted by Mr. Anil D. Ambani. The Company is one of the largest infrastructure companies engaged in developing infrastructure projects through various Special Purpose Vehicles (SPVs) in several sectors such as power, roads, metro rail, and airports in the infrastructure space and the defense sector. The Co. is also a leading utility Company with a presence across the value chain of power businesses i.e. generation, transmission, distribution and power trading.
The Company is a public limited Company and its equity and debts are listed on two recognized stock exchanges in India i.e. BSE and NSE.
KEY FINANCIAL INDICATORS (Standalone)
Key Parameters
Units
FY 22 - 23
(Audited)
FY 23 - 24
(Audited)
FY 24 - 25
(Unaudited - Midterm-Q1)
Operating Revenue
Rs.Crs.
810.00
424.68
31.00
EBITDA
Rs.Crs.
-180.20
-298.79
-55.00
PAT
Rs.Crs.
-3197.70
-1930.25
-206.00
Tangible Net Worth
Rs.Crs.
7352.04
6307.27
Not Available
Total Debt / Tangible Net Worth
Times
0.46
0.49
Not Available
Current Ratio
Times
1.16
1.12
Not Available
KEY FINANCIAL INDICATORS (Consolidated)
Key Parameters
Units
FY 22 - 23
(Audited)
FY 23 - 24
(Audited)
FY 24 - 25
(Unaudited - Midterm-Q1)
Operating Revenue
Rs.Crs.
20741.92
22066.86
7193.00
EBITDA
Rs.Crs.
1342.86
2162.36
676.00
PAT
Rs.Crs.
-2564.05
-1147.98
-93.00
Tangible Net Worth
Rs.Crs.
3140.88
4738.37
Not Available
Total Debt / Tangible Net Worth
Times
3.64
2.07
Not Available
Current Ratio
Times
1.01
1.03
Not Available
KEY COVENANTS OF THE FACILITY RATED
The terms of sanction include standard covenants normally stipulated for such facilities.
STATUS OF NON-COOPERATION WITH PREVIOUS CRA
Creadit Rating Agency
Status and Reason for Non-Cooparation
Date of Press Release
CARE
Reliance Infra has been listed under the non-cooperation issuer category by CARE Ratings Limited due to inadequate information provided by the company and non-payment of surveillance fees by the company.
26Feb2024
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
2.63
BWR D
(Reaffirmation)
10Feb2023
BWR D
(ISSUER NOT COOPERATING* /Reaffirmation)
05Jan2022
BWR D
(Reaffirmation)
NA
NA
0.00
NA
02Aug2023
BWR D
(removal from ISSUER NOT COOPERATING* category/Reaffirmed)
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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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