RATING RATIONALE
26 Nov 2019
Ganapati Builders Ltd.
Brickwork Ratings assigns the ratings for the Bank Loan Facilities of Rs.6.00 Crs. of Ganapati Builders Ltd.
Particulars| Facility** | Amount (Rs.Crs) | Tenure | Rating* |
|---|---|---|---|
| Fund Based | |||
| Term Loan Out-standing | 06.00 | Long Term | BWR B (Stable) |
| Sub Total | 06.00 | ||
| Grand Total | 06.00 | (Rupees Six Crores Only) | |
**Details of Bank facilities are provided in Annexure-I RATING ACTION / OUTLOOK : Stable
BWR believes that Ganapati Builders Ltd. business risk profile will be maintained over the medium term. The rating draws strength from the vast business experience of the directors, established track record of operations and successful completion of various real estate projects. However, the rating is constrained by the low scale of operations, Low financial risk profile marked by negative cash flow from operations & negative debt coverage indicators, inherent cyclicality of the real estate sector and high competition from other established players in the market. The Rating has been assigned Stable outlook as the growth in the business and profitability is expected to be improved in the medium term.
KEY RATING DRIVERS
Credit Strengths:
-
Experienced Management :
The Directors of the Company are having more than two decades of experience in real estate projects mainly in residential & commercial segments.
-
Low scale of Operation :
Though the company was established in 1995, the scale of operation remained low. Total Operating Income stood at Rs.1.84 Crs in FY18.
-
Low Financial risk profile :
The low financial risk profile is marked by a low scale of operations, Negative cash flow from operations, negative debt coverage indicators and highly leveraged capital structure.
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Inherent Cyclicality of the real estate sector :
The real-estate sector is cyclical in nature wherein the residential sector faces boom followed by a drop in commercial sector sales and vice versa
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 ability of the company to improve its scale of operations & overall financial risk profile and successful completion of ongoing real estate projects and achieve the projected financials would be the key rating sensitivities.
Positive: Successful completion and sale of ongoing real estate projects in Western Odisha.
Negative: The ratings may be downgraded if there is any delay in payments of its debt obligations and deterioration of the financial position of the company.
LIQUIDITY POSITION
The company's liquidity level has been adequate with the current ratio standing at 2.21 times in FY19.
PROFILEGanapati Builders Limited (GBL) is a Cuttack, Odisha based closely held company promoted by Mr. D Krishna Kumar Agarwal, Mr. Anand Agarwal and Mr. Santosh Kumar Agrawal in 1995. The company is engaged in real estate development. GBL focuses mainly on commercial & residential real estate projects in Sambalpur, Odisha. The company has developed various real estate projects in the state of Odisha namely Ganapati Villa, Ganapati residency, Ganapati Market Complex, New Ganapati Villa, KRP Residency etc. Currently, the company has undertaken a residential project in Sambalpur with a project cost of Rs.38.30 Crs. The super built-up area of the building is 145000 sqft consisting of 120 flats (3BHK of 66 and 2 BHK of 54). The company has so far received an amount of around Rs.1.46 crs towards customer advances.
KEY FINANCIAL INDICATORS| Key Parameters | Units |
FY 18-19 (Audited) |
FY 17-18 (Audited) |
|---|---|---|---|
| Operating Revenue | Rs.Crs. | 0.00 | 1.84 |
| EBITDA | Rs.Crs. | -0.02 | 0.15 |
| PAT | Rs.Crs. | 0.00 | 0.11 |
| Tangible Net Worth | Rs.Crs. | 1.09 | 1.09 |
| Total Debt/Tangible Net Worth | Times | 6.65 | 5.46 |
| Current Ratio | Times | 2.21 | 5.43 |
NON-COOPERATION WITH PREVIOUS RATING AGENCY ,IF ANY
| CRA Name | Date | Amount | Rating |
|---|---|---|---|
| CARE | 19 Sep 2019 | 8.00 | CARE B/Stable/ Issuer Not Co-operating |
| CARE | 18 Dec 2018 | 8.00 | CARE B/Stable/ Issuer Not Co-operating |
| S.No | Current Rating (2019) | Rating History | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Facilities | Tenure | Amount (Rs.Crs) | Rating | 2018 | 2017 | 2016 | ||||
| Fund Based | ||||||||||
| 1 | Term Loan - Out-standing | Long Term | 6.00 | BWR B(Stable) | NA | NA | NA | |||
| Total | 06.00 | (Rupees Six 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.
For More Information Contact:| Analytical Contacts | Investor Contacts |
|---|---|
|
Saroj K Das Ratings Analyst D : +91 90739 18940 sarojkumar.d@brickworkratings.com |
Liena Thakur Assistant Vice President - Corporate Communications M : +91 84339 94686 liena.t@brickworkratings.com |
|
K.Venkateswara Raju Associate Director - SME & Vendor Gradings B : +91 80 4040 9940 kvraju@brickworkratings.com |
|
| 1-860-425-2742 | |
| SL.No. | Type Of Facilities | Long Term(Rs.Crs.) | Short Term(Rs.Crs.) | Total(Rs.Crs.) |
|---|---|---|---|---|
| 1 | Term LoanOut-standing | 6.00 | _ | 6.00 |
| Total | 6.00 | |||
| TOTAL (Rupees Six Crores 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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