RATING RATIONALE
28 Mar 2020
Ambika Realcon Pvt. Ltd.
Brickwork Ratings assigns the ratings for the Bank Loan Facilities of Rs.38.11 Crs. of Ambika Realcon Pvt. Ltd.
Particulars| Facility** | Amount (Rs.Crs) | Tenure | Rating* |
|---|---|---|---|
| Fund Based | |||
| Term Loan | 38.11 | Long Term | BWR BB + (Stable) |
| Sub Total | 38.11 | ||
| Grand Total | 38.11 | (Rupees Thirty Eight Crores and Eleven lakhs Only) | |
**Details of Bank facilities are provided in Annexure-I
Note: Rs. 5.00 crs is yet to be disbursed. RATING ACTION / OUTLOOK : Stable
Brickwork ratings has assigned the long term rating of ‘BWR BB+ with Stable Outlook’ for the bank loan facilities of Ambika Realcon Pvt Ltd. The rating derives strength from the long standing experience of the promoters in the real estate sector, moderate cash flows, favourable debt protection metrics and healthy bookings for the unit. However the rating is constrained by project execution risks, intense competition in the industry, low operational track record and cyclical nature of real estate business.
The Rating has been assigned Stable outlook as the business risk profile of the company is stable and the growth in the business and profitability is expected to be maintained in the medium term.
KEY RATING DRIVERS
Credit Strengths:
- Experience of Promoters :
The promoters of the company are well experienced and have a long standing experience in industry and in executing real estate projects.
- Debt Protection Metrics :
DSCR and ISCR of the company stood at 4.59 and 19.22 respectively in FY19 indicating company’s adequacy to meet its debt obligations.
- Booking of the project :
The company has received bookings for 88% of the units in Phase-I and have shown a good growth in recent years.
Credit Risks:
- Company's Existence :
The company has pursued its business for only a couple of years and this venture is the first project undertaken by the company.
- Project Execution Risk :
The project is subject to risks associated with time and cost overrun. Moreover the real estate sector is cyclical in nature marked by volatile prices. Further the market is highly fragmented.
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
The ability of the company to improve its scale of operations, to execute its project on time and to strengthen its credit profile would be the key rating sensitivities.
Positive: The ratings may be upgraded in case of substantial improvements in the scale of operations, profitability & debt protection metrics of the company.
Negative: The ratings may be downgraded in case of substantial deterioration in the financial position of the company or in case of cost overrun on account of delay in project execution.
LIQUIDITY POSITION
ADEQUATE
The liquidity position of the company remained adequate with current ratio of the company standing at 2.17 times in FY19. Net Cash Accruals of the company stood at Rs. 2.31 crs in FY19. ISCR & DSCR of the company stood favourable at 19.22 times & 4.59 times in FY19.
PROFILEIncorporated in 2006, Ambika Realcon Pvt Ltd is a real estate developer. Mr. Diwaker Bansal & Mr. Ritesh Sehgal are the directors of the company. The current ongoing project Florence Park of the company is located in Mullanpur (New Chandigarh) for bringing up a residential project on 10.461 acres of land. The company is developing the project in three phases i.e Phase-I, II & III. The possession of the units for Phase-I will start from April 2020.
KEY FINANCIAL INDICATORS| Key Parameters | Units |
FY 18-19 (Audited) |
FY 17-18 (Audited) |
|---|---|---|---|
| Operating Revenue | Rs.Crs. | 53.17 | 21.42 |
| EBITDA | Rs.Crs. | 2.99 | 1.73 |
| PAT | Rs.Crs. | 1.45 | 0.66 |
| Tangible Net Worth | Rs.Crs. | 12.54 | 11.09 |
| Total Debt/Tangible Net Worth | Times | 3.19 | 2.71 |
| Current Ratio | Times | 2.17 | 2.30 |
RATING HISTORY (INCLUDING WITHDRAWAL AND SUSPENSION)
| S.No | Current Rating (2020) | Rating History | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Facilities | Tenure | Amount (Rs.Crs) | Rating | 2019 | 2018 | 2017 | ||||
| Fund Based | ||||||||||
| 1 | Term Loan | Long Term | 38.11 | BWR BB+(Stable) | NA | NA | NA | |||
| Total | 38.11 | (Rupees Thirty Eight Crores and Eleven 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 |
|---|---|
|
Mayank Sethi Ratings Analyst D : +91 74790 04036 B : +91 80 4040 9940 mayank.s@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 Loan | 38.11 | _ | 38.11 |
| Total | 38.11 | |||
| TOTAL (Rupees Thirty Eight Crores and Eleven lakhs Only) | ||||
Note: Rs. 5.00 crs is yet to be disbursed.
| 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 |
Ratings are not a recommendation or suggestion ,directly or indirectly, to you or any other person, to buy sell, make or hold on any investement,loan or security or to undertake any investement strategy with respect to any investment,loan or security or any issuer.
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.