RATING RATIONALE
08Sep2023

Nila Infrastructures Ltd.

Brickwork Ratings revises the ratings for the Bank Loan Facilities of Rs. 129.64 Crs. of Nila Infrastructures Ltd.

Particulars
Facilities** Amount (Rs.Crs.) Tenure Rating#
Previous Present Previous
(10 Jun 2022)
Present
Fund Based 129.42 90.22 Long Term BWR BBB+ /Stable
Reaffirmation
BWR BBB /Stable
Downgrade
(2.00) (0.00)
Non Fund Based 59.42 39.42 Short Term BWR A2
Reaffirmation
BWR A3 +
Downgrade
Grand Total 188.84 129.64 (Rupees One Hundred Twenty Nine Crores and Sixty Four lakhs Only)
#Please refer to BWR website www.brickworkratings.com for definition of the ratings
**Details of Bank Loan facilities,consolidation or instruments are provided in Annexure


RATING ACTION / OUTLOOK

The rating downgrade primarily factors the nonachievement of its projected performance in last few years. The revision in the ratings of the bank facilities of Nila Infrastructures Ltd takes into account the deterioration in its business risk profile in FY22 and lower-than-expected performance for FY23 as reflected in the decline in its total operating income and lower than envisaged cash accruals and profitability. The ratings continue to draw strength from its operational track record, strong regional market presence, diversified revenue stream, experienced management having healthy relationships with customers, and its comfortable financial risk profile. However, the ratings continue to be constrained by the moderate scale of operations, exposure to project execution risks, uncertainty in revenue streams emanating from the tender based nature of business, susceptibility to economic downturns, its exposure to changes in regulatory framework related to PPP models and working capital intensive nature of operations.

 The ‘Stable’ outlook indicates BWR’s opinion that the Company will continue to benefit from its long track record of operations and the experience of its management and promoters. BWR expects that  Nila Infrastructures Ltd's business risk profile will be maintained over the medium term. 

 

KEY RATING DRIVERS

Credit Strengths:


Credit Risks:

ANALYTICAL APPROACH - Standalone

For arriving at its ratings, BWR has applied standalone approach and its rating methodology as detailed in the Rating Criteria detailed below (hyperlinks provided at the end of this rationale).

RATING SENSITIVITIES

Going forward the company’s ability to improve the scale of operations, improve and maintain profitability, the debt servicing capability & liquidity, and manage its working capital efficiently will be the key rating sensitivities.

Upward:

Downward:

LIQUIDITY INDICATORS - Adequate

NILA has an adequate liquidity profile. Further, it is noted that Company has significantly reduced the overall debt. The Company is expecting robust cash flow from next year and the liquidity will thus see an improvement from next year onwards.

ABOUT THE ENTITY
Macro Economic Indicator Sector Industry Basic Industry
Consumer Discretionary Realty Realty Residential, Commercial Projects

Incorporated in February 1990 at Ahmedabad, Nila Infrastructures Limited (NIL) is the flagship company of the Ahmedabad-based Sambhaav Group. NILA started operations as a real estate developer in Gujarat and presently the Company is a diversified infrastructure entity operating in Gujarat and Rajasthan. It is listed on BSE and NSE. Mr. Manoj Vadodaria is the Chairman & Managing Director and Mr. Deep S. Vadodaria is the Director of the Company.   In addition, the Company also undertakes construction works for selected reputed corporate developers. With a business vintage of about 25 years, Nila Infrastructures Limited is now one of the leading companies in civic urban infrastructure development. The company concentrated its efforts on Affordable Housing, one of the fastest growing sectors and established itself as an iconic presence in civic urban infrastructure as well.

KEY FINANCIAL INDICATORS (Standalone)
Key Parameters Units FY 21-22
(Audited)
FY 22-23
(Audited)
FY 23-24
(Unaudited - Midterm_Q1)
Operating Revenue Rs.Crs. 93.35 114.42 24.29
EBITDA Rs.Crs. 7.53 1.92 -0.43
PAT Rs.Crs. 2.51 1.77 0.45
Tangible Net Worth Rs.Crs. 146.47 148.28 Not Available
Total Debt/TNW Times 0.74 0.44 Not Available
Current Ratio Times 1.36 1.00 Not Available
KEY COVENANTS OF THE FACILITY RATED

The terms of sanction include standard covenants normally stipulated for such facilities.


STATUS OF NON-COOPERATION WITH PREVIOUS CRA

Not Applicable

ANY OTHER INFORMATION

Not Applicable

RATING HISTORY FOR THE PREVIOUS THREE YEARS (including withdrawal and suspended)
Facilities Current Rating (2023) 2022 2021 2020
Type Tenure Amount
(Rs.Crs.)
Rating Date Rating Date Rating Date Rating
Fund Based LT 90.22
BWR BBB/Stable
(Downgrade)
10Jun2022
BWR BBB+ Stable
(Reaffirmation)
19Mar2021
BWR BBB+Stable
(Reaffirmation)
13Jan2020
BWR BBB+ Stable
(Reaffirmation)
Non Fund Based ST 39.42
BWR A3+
(Downgrade)
10Jun2022
BWR A2
(Reaffirmation)
19Mar2021
BWR A2
(Reaffirmation)
13Jan2020
BWR A2
(Reaffirmation)
Grand Total 129.64 (Rupees One Hundred Twenty Nine Crores and Sixty Four lakhs Only)
COMPLEXITY LEVELS OF THE INSTRUMENTS - Simple

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
Analytical Contacts

Deepthi Nair V.

Rating Analyst deepthinair.v@brickworkratings.com

RamaKrishna

Director - Ratings ramakrishna@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com
Nila Infrastructures Ltd.
ANNEXURE-I
Details of Bank Facilities rated by BWR
SL.No. Name of the Bank/Lender Type Of Facilities Long Term(Rs.Crs.) Short Term(Rs.Crs.) Total(Rs.Crs.)
1 Bandhan Bank Emergency Credit Line Guarantee Scheme (ECLGS)Sanctioned _ _ 0.00
2 Bandhan Bank Line of CreditSanctioned 80.00 _ 80.00
3 Punjab National Bank Bank GuaranteeSanctioned _ 13.00 13.00
4 Punjab National Bank Over DraftSanctioned 2.00 _ 2.00
5 Shinhan Bank Over DraftSanctioned _ _ 0.00
6 State Bank Of India (SBI) Emergency Credit Line Guarantee Scheme (ECLGS)Sanctioned _ _ 0.00
7 State Bank Of India (SBI) Dropdown ODSanctioned _ _ 0.00
8 Union Bank of India Bank GuaranteeSanctioned _ 19.42 19.42
9 Union Bank of India Over DraftSanctioned 2.00 _ 2.00
10 Yes Bank Bank GuaranteeSanctioned _ 7.00 7.00
Sub-Limit (Over Draft) Sanctioned (0.00)
11 Yes Bank Emergency Credit Line Guarantee Scheme (ECLGS)Sanctioned _ _ 0.00
12 Yes Bank Term LoanSanctioned 6.22 _ 6.22
Total 90.22 39.42 129.64
TOTAL (Rupees One Hundred Twenty Nine Crores and Sixty Four lakhs Only)
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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 11,560 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.

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