RATING RATIONALE
10 Oct 2019
Acuity India Resorts Private Limited
Brickwork Ratings assigns the ratings for the Bank Loan Facilities of Rs.5.72 Crs. of Acuity India Resorts Private Limited
Particulars| Facility** | Amount (Rs.Crs) | Tenure | Rating* |
|---|---|---|---|
| Fund Based | |||
|
Cash Credit
Sanctioned
Term Loan Sanctioned |
00.50
05.22 |
Long Term | BWR D |
| Sub Total | 05.72 | ||
| Grand Total | 05.72 | (Rupees Five Crores and Seventy Two lakhs Only) | |
**Details of Bank facilities are provided in Annexure-I KEY RATING DRIVERS
BWR has taken a Standalone view of Acuity India Resorts Private Limited and essentially relied upon the audited financial results up to FY19 and publicly available information and information / clarifications provided by the entity’s management.
The rating assignment is based on the ongoing delays in servicing of debt obligations, weak financials risk profile, stretched liquidity profile and volatility in revenue and loss incurred by the company in the last two years. The rating also factors extensive experience of the promoters in the real estate and hospitality industry and established business operation.
Weakness:
Weak financial risk profile: The Company's financial risk profile is constrained by weak debt protection metrics with ISCR of 1.03x & DSCR at 0.67x and gearing at 5.48x in FY19. Tangible net worth is low at Rs. 2.95 Crs. The Company's scale of operation has remained volatile and the company has incurred a loss for the last two years.
Delays in payment of Debt Obligations :The company is not regular in payment of its debt obligations with reported delays in repayment of interest and installment for its bank term loans.
Strength:
Extensive promoter experience: The long standing experience of the promoter in the hotel and real estate industry have helped them establish relationships with customers and suppliers, which will continue to support the business risk profile.
ANALYTICAL APPROACH AND APPLICABLE RATING CRITERIA
For arriving at its ratings, BWR has applied its rating methodology as detailed in the Rating Criteria detailed below (hyperlinks provided at the end of this rationale).
RATING SENSITIVITIES
Going forward, the Company’s ability to timely service its debt repayments, improve profitability and improve its liquidity position would remain the key rating sensitivities.
Positive:
The Company's ability to improve its scale of operations along with profitability resulting improvement in overall liquidity position and timely servicing of its debt obligations will be positive for the ratings.
LIQUIDITY POSITION
Liquidity is weak as reflected in delays in servicing of interest due on term loan.The company has witnessed the decrease in net cash accruals from Rs. 0.38 Crs in FY18 to Rs. 0.03 Crs in FY19. Current Ratio of the company stood at 0.23 times in FY18 and improves marginally to 0.65 times in FY19. The cash flows are constrained due to losses incurred in the last two years and high working capital intensive operations of the company.
PROFILEAcuity India Resorts Private Limited was incorporated in 2012 for carrying out an activity of hospitality business. The Company is operating a resort and spa in the name of ‘7 Seasons Resorts & Spa’ at Khambhalia Dwarka highway, Lakhabawal, Jamnagar, Gujarat. It also offers facilities like banquet, restaurants, gym, spa. etc.
KEY FINANCIAL INDICATORS| Key Parameters | Units |
FY 18-19 |
FY 17-18 |
|---|---|---|---|
| Operating Revenue | Rs.Crs. | 6.30 | 7.00 |
| EBITDA | Rs.Crs. | 0.99 | 1.28 |
| PAT | Rs.Crs. | -0.68 | -1.30 |
| Tangible Net Worth | Rs.Crs. | 2.95 | 3.63 |
| Total Debt/Tangible Net Worth | Times | 5.48 | 3.21 |
| Current Ratio | Times | 0.65 | 0.23 |
NON-COOPERATION WITH PREVIOUS RATING AGENCY ,IF ANY
| CRA Name | Date | Amount | Rating |
|---|---|---|---|
| CARE | 30 Jul 2019 | 8.37 | CARE D; Issuer not cooperating |
| S.No | Current Rating (2019) | Rating History | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Facilities | Tenure | Amount (Rs.Crs) | Rating | 2018 | 2017 | 2016 | ||||
| Fund Based | ||||||||||
| 1 | Cash Credit - SanctionedTerm Loan - Sanctioned | Long Term | 0.505.22 | BWR D(Pronounced as BWR D ) | NA | NA | NA | |||
| Total | 05.72 | (Rupees Five Crores and Seventy Two lakhs 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 Criteria : For More Information Contact:| Analytical Contacts | Investor Contacts |
|---|---|
|
Kunjal Dabhi Ratings Analyst B : +91 79 66174046 / 47 kunjal.r@brickworkratings.com |
Liena Thakur Assistant Vice President - Corporate Communications M : +91 84339 94686 liena.t@brickworkratings.com |
|
Noman Agashiwala Associate Director-Ratings D : +91 22 6745 6630 B : +91 22 2831 1426, +91 22 2831 1439 noman.a@brickworkratings.com |
|
| 1-860-425-2742 | |
| SL.No. | Type Of Facilities | Long Term(Rs.Crs.) | Short Term(Rs.Crs.) | Total(Rs.Crs.) |
|---|---|---|---|---|
| 1 | Cash CreditSanctioned | 0.50 | _ | 0.50 |
| 2 | Term LoanSanctioned | 5.22 | _ | 5.22 |
| Total | 5.72 | |||
| TOTAL (Rupees Five Crores and Seventy Two lakhs Only) | ||||
| Instrument | Issue Date | Amount (Rs.Crs) | Coupon Rate | Maturity Date | ISIN Particulars |
|---|---|---|---|---|---|
| NA | NA | NA | NA | NA | NA |
| Name of Entity | % Ownership | Extent of consolidation | Rationale for consolidation |
|---|---|---|---|
| NA | NA | NA | NA |
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Brickwork Ratings (BWR), a SEBI registered Credit Rating Agency, accredited by RBI and empaneled by NSIC, offers Bank Loan, NCD, Commercial Paper, MSME ratings and grading services. NABARD has empaneled Brickwork for MFI and NGO grading. BWR is accredited by IREDA & the Ministry of New and Renewable Energy (MNRE), Government of India. Brickwork Ratings has Canara Bank, a leading public sector bank, as its promoter 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.
Brickwork Ratings (BWR) has assigned the rating based on the information obtained from the issuer and other reliable sources, which are deemed to be accurate. BWR has taken considerable steps to avoid any data distortion; however, it does not examine the precision or completeness of the information obtained. And hence, the information in this report is presented "as is" without any express or implied warranty of any kind. BWR does not make any representation in respect to the truth or accuracy of any such information. The rating assigned by BWR should be treated as an opinion rather than a recommendation to buy, sell or hold the rated instrument and BWR shall not be liable for any losses incurred by users from any use of this report or its contents. BWR has the right to change, suspend or withdraw the ratings at any time for any reasons.