Brickwork Ratings assigns the ratings for the Bank Loan Facilities of Rs.8.67 Crs. of Hotel Shubh Inn
ParticularsFacility** | Amount (Rs.Crs) | Tenure | Rating* |
---|---|---|---|
Fund Based | |||
Term Loan
Out-standing
GECL Out-standing |
06.67
02.00 |
Long Term | BWR B - (Stable) |
Sub Total | 08.67 | ||
Grand Total | 08.67 | (Rupees Eight Crores and Sixty Seven lakhs Only) |
BWR assigns the long-term rating of BWR B-/Stable to the bank loan facilities of Hotel Shubh Inn (HSI).
BWR believes that Hotel Shubh Inn 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
BWR has essentially relied upon the audited financial statements of Hotel Shubh Inn of FY19, FY20, and FY21 and FY22 (provisional) and projected financial statements of FY23 and FY24, publicly available information and information/clarifications provided by the entity’s management. The rating draws strength from the vast business experience of the partner/s, established track of operations and above-average financial risk profile. However, the rating is constrained by the scale of operations, constitution of the firm and high competition from other established players in the market.
Going forward, the ability of the entity to achieve projected revenue & profitability margins and manage liquidity would be key rating sensitivities
Credit Strengths:
The company has a strong promoter background with management having vast experience in the hospitality business.
The hotel property has 45 keys in total and 4 banquet halls, the company has a modest scale of operations.
Profitability is vulnerable to the seasonal nature of the Industry, which will affect the Average Room Rent and Occupancy rates and thereby affecting the profitability
The company recorded decline in revenue to Rs.1.52 crs in FY2021 on account of COVID 19 wherein the operations of the hospitality sector was impacted. However, the company recorded increase in revenue to Rs.3.40 crs in FY2022 (Prov).The Debt services ratio of the company is below 1.
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: The ratings may be upgraded if revenue, profitability and overall credit profile show substantial improvement.
Negative: The rating may be downgraded if there is a significant deterioration in the business and financial risk profile of the company from its current level.
LIQUIDITY POSITION
Liquidity Position: stretched
The liquidity profile of the company is stretched with respect to business operation. The net cash accruals of the company stand at Rs 0.31 cr in FY22 (provisional) with cash and cash equivalents of Rs 0.10 cr in FY22 (provisional). The current ratio of 1.46 X in FY22 (provisional) has improved as against 0.46X for FY21.
PROFILEHotel Shubh Inn (HSI or “the Company ) was incorporated in the year 2016 in Bhopal , Madhya Pradesh. The company is promoted by Mr.Ankit Sharma, Mr.Darshan Chawla, Mr.Roshan Chawla, Mr. Pinan Chawla,Mr. Jitendra Sharma and Mr.Rajesh Sharma. The promoters have more than two decades of experience in the tourism industry.
KEY FINANCIAL INDICATORSKey Parameters | Units |
FY 20-21 (Audited) |
FY 19-20 (Audited) |
---|---|---|---|
Operating Revenue | Rs.Crs. | 1.52 | 5.91 |
EBITDA | Rs.Crs. | 0.20 | 1.68 |
PAT | Rs.Crs. | -2.25 | -1.19 |
Tangible Net Worth | Rs.Crs. | 1.72 | 2.91 |
Total Debt/Tangible Net Worth | Times | 11.57 | 6.45 |
Current Ratio | Times | 0.74 | 0.41 |
Nil
CRA Name | Date | Amount | Rating |
---|---|---|---|
CRISIL | 08 Jul 2022 | 6.50 | Crisil D |
S.No | Current Rating (2022) | Rating History | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Facilities | Tenure | Amount (Rs.Crs) | Rating | 2021 | 2020 | 2019 | ||||
Fund Based | ||||||||||
1 | Term Loan - Out-standingGECL - Out-standing | Long Term | 06.6702.00 | BWR B-(Stable) | NA | NA | NA | |||
Total | 08.67 | (Rupees Eight Crores and Sixty Seven 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 | |
---|---|
Harshad Jaiwant Agawane Lead Analyst harshad.a@brickworkratings.com |
Ramesh N Associate Director - Ratings ramesh.n@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 | UCO Bank | Term LoanOut-standing | 6.67 | _ | 6.67 |
2 | UCO Bank | GECLOut-standing | 2.00 | _ | 2.00 |
Total | 8.67 | 0.00 | 8.67 | ||
TOTAL (Rupees Eight Crores and Sixty Seven 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 |
Brickwork Ratings (BWR), a Securities and Exchange Board of India [SEBI] registered Credit Rating Agency and accredited by Reserve Bank of India [RBI], offers credit ratings of Bank Loan, Non- convertible / convertible / partially convertible debentures and other capital market instruments and bonds, Commercial Paper, perpetual bonds, asset-backed and mortgage-backed securities, partial guarantees and other structured / credit enhanced debt instruments, Security Receipts, Securitization Products, Municipal Bonds, etc. BWR has rated over 12,000 medium and large corporates and financial institutions’ instruments. BWR has also rated NGOs, Educational Institutions, Hospitals, Real Estate Developers, Urban Local Bodies and Municipal Corporations. BWR has Canara Bank, a leading public sector bank, as one of the promoters 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 India Pvt. Ltd. (BWR), a Securities and Exchange Board of India [SEBI] registered Credit Rating Agency and accredited by the Reserve Bank of India [RBI], offers credit ratings of Bank Loan facilities, Non- convertible / convertible / partially convertible debentures and other capital market instruments and bonds, Commercial Paper, perpetual bonds, asset-backed and mortgage-backed securities, partial guarantees and other structured / credit enhanced debt instruments, Security Receipts, Securitization Products, Municipal Bonds, etc. [ hereafter referred to as "Instruments"]. BWR also rates NGOs, Educational Institutions, Hospitals, Real Estate Developers, Urban Local Bodies and Municipal Corporations.
BWR wishes to inform all persons who may come across Rating Rationales and Rating Reports provided by BWR that the ratings assigned by BWR are based on information obtained from the issuer of the instrument and other reliable sources, which in BWR's best judgment are considered reliable. The Rating Rationale / Rating Report & other rating communications are intended for the jurisdiction of India only. The reports should not be the sole or primary basis for any investment decision within the meaning of any law or regulation (including the laws and regulations applicable in Europe and also the USA).
BWR also wishes to inform that access or use of the said documents does not create a client relationship between the user and BWR.
The ratings assigned by BWR are only an expression of BWR's opinion on the entity / instrument and should not in any manner be construed as being a recommendation to either, purchase, hold or sell the instrument.
BWR also wishes to abundantly clarify that these ratings are not to be considered as an investment advice in any jurisdiction nor are they to be used as a basis for or as an alternative to independent financial advice and judgment obtained from the user's financial advisors. BWR shall not be liable to any losses incurred by the users of these Rating Rationales, Rating Reports or its contents. BWR reserves the right to vary, modify, suspend or withdraw the ratings at any time without assigning reasons for the same.
BWR's ratings reflect BWR's opinion on the day the ratings are published and are not reflective of factual circumstances that may have arisen on a later date. BWR is not obliged to update its opinion based on any public notification, in any form or format although BWR may disseminate its opinion and analysis when deemed fit.
Neither BWR nor its affiliates, third party providers, as well as the directors, officers, shareholders, employees or agents (collectively, "BWR Party") guarantee the accuracy, completeness or adequacy of the Ratings, and no BWR Party shall have any liability for any errors, omissions, or interruptions therein, regardless of the cause, or for the results obtained from the use of any part of the Rating Rationales or Rating Reports. Each BWR Party disclaims all express or implied warranties, including, but not limited to, any warranties of merchantability, suitability or fitness for a particular purpose or use. In no event shall any BWR Party be liable to any one for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of any part of the Rating Rationales and/or Rating Reports even if advised of the possibility of such damages. However, BWR or its associates may have other commercial transactions with the company/entity. BWR and its affiliates do not act as a fiduciary.
BWR keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of the respective activity. As a result, certain business units of BWR may have information that is not available to other BWR business units. BWR has established policies and procedures to maintain the confidentiality of certain non-public information received in connection with each analytical process.
BWR clarifies that it may have been paid a fee by the issuers or underwriters of the instruments, facilities, securities etc., or from obligors. BWR's public ratings and analysis are made available on its web site, www.brickworkratings.com. More detailed information may be provided for a fee. BWR's rating criteria are also generally made available without charge on BWR's website.
This disclaimer forms an integral part of the Ratings Rationales / Rating Reports or other press releases, advisories, communications issued by BWR and circulation of the ratings without this disclaimer is prohibited.
BWR is bound by the Code of Conduct for Credit Rating Agencies issued by the Securities and Exchange Board of India and is governed by the applicable regulations issued by the Securities and Exchange Board of India as amended from time to time.