Brickwork Ratings assigns the ratings for the Bank Loan Facilities of Rs.7.50 Crs. of Avirat Infrastructure Pvt. Ltd.
Particulars| Facility** | Amount (Rs.Crs) | Tenure | Rating* |
|---|---|---|---|
| Fund Based | |||
| Over Draft Sanctioned | 07.50 | Long Term | BWR B (Stable) |
| Sub Total | 07.50 | ||
| Grand Total | 07.50 | (Rupees Seven Crores and Fifty lakhs Only) | |
BWR has essentially relied upon the audited financial statements of Avirat Infrastructure Pvt Ltd for FY18- 19, FY19-20, FY20-21, provisional financial statements of F21-22, and projected financial statements of FY22-23, publicly available information, and information/clarifications provided by the entity’s management. The rating draws strength from the vast business experience of the member/s, established track of operations, and average financial risk profile. However, the rating is constrained by the geographical concentration risk, High Execution Risk of projects as well as the intense competition from other established players in the market.
BWR believes that Avirat Infrastructure Pvt. Ltd. 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 revised to 'Negative' if the revenues go down and profit margins show lower than expected figures.
KEY RATING DRIVERS
Credit Strengths:
All the directors have extensive experience of more than 2 decades in the construction industry and have established track record withstanding industry cycles. Over the years, the directors have established strong relationships with its clients, which has helped company in getting repeat business
TOL/TNW is 10.44 times & Debt/TNW is 7.18 times in FY21, which is on the higher side, as the company will start booking revenue from FY23 onwards. TNW is Rs. 13.33 Crs in FY21(Audited).
The firm faces tough competition from well established players and upcoming projects located in Ahmedabad which could impact its occupancy level and pricing flexibility in the near future
The company’s operations are susceptible to many external factors such as timely clearances from various regulatory bodies, the handover of sites, labour unrest, and other factors. The effect of anyof these could be substantial on the company's timeline of the completion of projects, The realization of proceeds of the business depends on the ability to complete the projects and also receivables from customers successfully.
The company is exposed to geographical concentration risk as it executes projects only in the state of Gujarat and only in Ahmedabad. Any adverse movement in the Ahmedabad real estate market may adversely impact the sales and collections of the company.
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
Positive :
. Sustained and substantial growth in revenue and profitability.
. Timely completion of project without cost overrun.
Negative:
. Decline in revenue and deterioration in profit margins.
. Decline in profit margins due to project executions.
LIQUIDITY POSITION
LIQUIDITY INDICATORS - Stretched
The firm's average working capital utilization is above 90% in last year. Net Cash Accruals for FY 21 is Rs. 1.11 Crs. Current Ratio is 1.53x for FY 21. ISCR for FY 21 is 0.70x . However promoters have been bringing in unsecured loans as and when required.
PROFILEEstablished in 1985, Avirat Infrastructure Pvt Ltd is engaged in construction of real estate. The firm is ISO 9001: 2000 certified company. For more than two decades, the company has constructed more than 53 projects in real estate.
KEY FINANCIAL INDICATORS| Key Parameters | Units |
FY 20-21 (Audited) |
FY 19-20 (Audited) |
|---|---|---|---|
| Operating Revenue | Rs.Crs. | 0.00 | 0.00 |
| EBITDA | Rs.Crs. | 3.25 | 0.69 |
| PAT | Rs.Crs. | 1.05 | 0.64 |
| Tangible Net Worth | Rs.Crs. | 13.33 | 12.28 |
| Total Debt/Tangible Net Worth | Times | 7.18 | 6.81 |
| Current Ratio | Times | 1.53 | 1.44 |
| S.No | Current Rating (2022) | Rating History | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Facilities | Tenure | Amount (Rs.Crs) | Rating | 2021 | 2020 | 2019 | ||||
| Fund Based | ||||||||||
| 1 | Over Draft - Sanctioned | Long Term | 07.50 | BWR B(Stable) | NA | NA | NA | |||
| Total | 07.50 | (Rupees Seven Crores and Fifty 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 | |
|---|---|
|
Joshi Vishalkumar Dinkarkumar Lead Analyst vishalkumar.j@brickworkratings.com |
Dileep Narayan Singh Director dileep.s@brickworkratings.com |
| 1-860-425-2742 | media@brickworkratings.com | |
| SL.No. | Name of the Bank/Lender | Type Of Facilities | Long Term(Rs.Crs.) | Short Term(Rs.Crs.) | Total(Rs.Crs.) |
|---|---|---|---|---|---|
| 1 | The Mehsana Urban Co-operative Bank | Over DraftSanctioned | 7.50 | _ | 7.50 |
| Total | 7.50 | 0.00 | 7.50 | ||
| TOTAL (Rupees Seven Crores and Fifty 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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