Ayaan Educational Society

Brickwork Ratings assigns the ratings for the Bank Loan Facilities of Rs.9.50 Crs. of Ayaan Educational Society

Particulars

Facility**	Amount (Rs.Crs)	Tenure	Rating*
Non-Fund Based
Bank Guarantee - Sanctioned	09.50	Long Term	BWR B + (Stable)
Sub Total	09.50
Grand Total	09.50	(Rupees Nine Crores and Fifty lakhs Only)

*Please refer to BWR website www.brickworkratings.com for definition of the ratings
**Details of Bank facilities are provided in Annexure-I RATING ACTION / OUTLOOK : Stable

BWR believes that Ayaan Educational Society business risk profile will be maintained over the medium term. The 'Stable' outlook indicates a low likelihood of rating change over the medium term. The rating outlook may be revised to 'Positive' in case the revenues and profit show sustained improvement. The rating outlook may be revisd to 'Negative' if the revenues go down and profit margins show lower than expected figures.

KEY RATING DRIVERS

Credit Strengths:

• Locational Advantage :
  The company/Firm is located in Hyderabad cluster and thus has a competitive advantage in terms of skilled labor, logistics, production knowledge and vendors making the company more efficient and cost effective.
• Revenue from Operations :
  The company`s revenue from operations has grown substantially by 101.86 % in the FY 19.
• Low Gearing :
  The company has minimal dependency on external debt. It does not have any debt obligations with Banks and Financial Institutions apart from a Bank Guarantee. Majority of its long term borrowings are on account of unsecured loans extended to the society and inter-society loans.

Credit Risks:

• Competition in the Industry :
  Entry barriers in the industry are low on account of limited capital and technology requirement and also low differentiation in the end product leading to intense competition and limiting the pricing power resulting in low profitability.
• Company’s Existence :
  The company has pursued its business for only couple of years and has low scale of operations.

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).

PROFILE

M/S  Ayaan   Educational Society  was  established  in the year  1998.   The  Society   is engaged  in  providing  educational services.  M/ S  Ayaan  College   of Engineering   & Technology  is the only institute that is being run and managed by this Society. The institute is built on a 35 acre land which is owned by the society and offers  various  courses  like B.Tech  branches  in  Computer  Science, Electronics  and Communication  Engineering, Electrical  and Electronics  Engineering  and Civil  Engineering  and M Tech  in  Power  Electronics  and Drives.  This institute  is affiliated  with  Jawaharlal Nehru Technological University,  Hyderabad  and approved buy AICTE.  This institute is also recognized  by  Government  of A.p.  & Telegana.  The  Ayyan  Hospital  running since  3  years  with the motivation of  helping the poor patients and quality  health awareness in poor.  The  hospital  having  330   beds   & Labs  with  multi  specialty  facilities.

The  Society  is  waiting for    approval  from   Indian Medical   Council,  New  Delhi   for establishing the  MBBS  course  with  150 students intake  for  which  IMC  required  Proposed  Bank Grantee from  Bank.  All the  below  persons  are  Governing  Members of the society  having  good  experience  in  the line    of  Educational  institutes.

KEY FINANCIAL INDICATORS

Key Parameters	Units	FY 18-19 (Audited)	FY 17-18 (Audited)
Operating Revenue	Rs.Crs.	9.30	4.61
EBITDA	Rs.Crs.	5.35	2.12
PAT	Rs.Crs.	3.76	-0.23
Tangible Net Worth	Rs.Crs.	17.41	13.64
Total Debt/Tangible Net Worth	Times	0.13	0.15
Current Ratio	Times	1.41	5.41

RATING HISTORY (INCLUDING WITHDRAWAL AND SUSPENSION)

S.No	Current Rating (2019)				Rating History
	Facilities	Tenure	Amount (Rs.Crs)	Rating	2018	2017	2016
Non-Fund Based
1	Bank Guarantee - Sanctioned	Long Term	9.50	BWR B+ (Stable)	NA	NA	NA
Total			09.50	(Rupees Nine Crores and Fifty lakhs Only)

COMPLEXITY LEVELS OF THE INSTRUMENTS

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.

For More Information Contact:

Analytical Contacts	Investor Contacts
Anisha Reddy Ratings Analyst B : +91 80 4040 9940 Ext : 345 anisha.r@brickworkratings.com	Liena Thakur Assistant Vice President - Corporate Communications M : +91 84339 94686 liena.t@brickworkratings.com
K Nagaraj Associate Director - Ratings B : +91 80 4040 9940 nagaraj.ks@brickworkratings.com
1-860-425-2742

SL.No.	Type Of Facilities	Long Term(Rs.Crs.)	Short Term(Rs.Crs.)	Total(Rs.Crs.)
1	Bank Guarantee - Sanctioned	9.50	_	9.50
Total				9.50
TOTAL (Rupees Nine Crores and Fifty lakhs Only)