Brickwork Ratings reaffirms the ratings for the Bank Loan Facilities of Rs.300.00 Crs of Cowtown Infotech Services Private Limited (CISPL).
ParticularsFacilities** | Amount (Rs.Crs.) | Tenure | Rating# | ||
---|---|---|---|---|---|
Previous | Present | Previous (28 Jul 2020) |
Present | ||
Non Fund Based | 300.00 | 300.00 | Short Term |
BWR A3 (CE)
|
BWR A3 (CE)
Reaffirmation |
(75.00) | (75.00) | ||||
Grand Total | 300.00 | 300.00 | (Rupees Three Hundred Crores Only) |
The Ratings with the symbol CE are based on Credit Enhancement in the form of Corporate Guarantee of Macrotech Developers Limited (MDL). The Corporate Guarantee has been stipulated as a condition of sanction of the said facilities by the bank.
Unsupported rating of Cowtown Infotech Services Private Limited is BWR A3.
Reaffirmation BWR A3 (CE).
The rating continues to factor in the established track record of Lodha Group, financial and managerial support from the flagship Company Macrotech Developers Limited and importance of the Company to the Group. The rating also continues to factor in the Corporate Guarantee extended by MDL. The rating is, however constrained by transactions mainly happening with related parties, thin profitability margins and the Group’s relatively high level of debt.
KEY RATING DRIVERSCredit Strengths:
The group has completed ~80 msf developable area and ~74 msf of developable area under ongoing & planned projects. In addition to ongoing and planned projects, the group claims to have land reserves of approximately 3,803 acres for future development in the MMR, with the potential to develop approximately 322 million square feet of developable Area. The group has presence across Mumbai Metropolitan region (MMR), Pune and UK.
CISPL is a part of Lodha Group and has substantial business, financial, managerial and operational linkages with Lodha Group. For the given Bank facility of CISPL, the Group’s flagship company Macrotech Developers Limited has given corporate guarantee. Hence, rating is also linked to the overall performance of Lodha Group.
The Company handles the procurement and supply of construction materials for and on behalf of other Group companies and also undertakes construction activities for the Group’s projects. This is done in order to avail the benefits of the resultant economies of scale. Going by the number of projects (ongoing and upcoming) being executed by Lodha Group, there is revenue visibility for CISPL in the medium to long term. However, profit margins are very thin
Credit Risks:
The Group currently has relatively high debt. However, a major part of the debt is by way of project specific loans which are largely self-liquidating in nature, being repaid from the sale proceeds.The Group has taken various measures to reduced the debt level including successfully conclusion of IPO in April 2021 and various other steps envisaged such as divestment in commercial assets, development of logistic and industrial park.
The business of the company is concentrated to the group activities including supply of building material, construction activities etc.
The Performance of the group Companies in the real estate sector and the RE industry in general.
LIQUIDITY INDICATORS - Adequate
The company does not have any term debt repayment obligations. Since it in effect acts as a supplier of building materials and accessories to the group companies, they take care of the due repayments. The receivables from the group is around Rs.475 Crs as at March 2021. The Liquidity is considered adequate as group support is always there,
ABOUT THE ENTITYCowtown Infotech Services Private Limited (CISPL) was incorporated in 1985. Company is a part of of Lodha group where Macrotech Developers Limited (MDL) (earlier Lodha Developers Pvt Ltd) holds 100% equity stake. CISPL's business is in trading of construction related materials, both for exterior and interior uses, like tiles, ceramic materials, granite and other stones, lighting, etc. and income from construction contract for Group companies executing various projects.
Macrotech Developers Limited: Established in 1980, the Lodha Group is a major real estate developer in Mumbai Metropolitan Region (MMR) with focus on developing residential and office spaces. Macrotech Developers Limited (earlier known as Lodha Developers Limited) is the flagship company of the group was incorporated in 1995. The name of the Company has been changed to “Marcotech Developers Limited” from “Lodha Developers Limited” with effect from 24th of May 2019. The brand name continues as Lodha and all projects will continue to be named and sold/leased under the Lodha brands. The board consists of six members with Mr. Abhishek Mangal Prabhat Lodha as Managing Director and Chief Executive Officer and Board comprises two independent Directors.
KEY FINANCIAL INDICATORS (Standalone)Key Parameters | Units |
FY 20-21 (Audited) |
FY 19-20 (Audited) |
---|---|---|---|
Operating Revenue | Rs.Crs. | 1042.30 | 2208.39 |
EBITDA | Rs.Crs. | 31.08 | 51.69 |
PAT | Rs.Crs. | 19.84 | 3.90 |
Tangible Net Worth | Rs.Crs. | -14.72 | -34.58 |
Total Debt/Tangible Net Worth | Times | -17.46 | -5.42 |
Current Ratio | Times | 1.03 | 1.05 |
Facilities | Current Rating (2021) | 2020 | 2019 | 2018 | |||||
---|---|---|---|---|---|---|---|---|---|
Type | Tenure | Amount (Rs.Crs.) |
Rating | Date | Rating | Date | Rating | Date | Rating |
Non Fund Based | ST | 300.00 |
BWR A3(CE)
(Reaffirmation) |
28Jul2020 |
BWR A3 (CE)
() |
09May2019 |
BWR A2+(SO)
(Reaffirmed ) |
09Feb2018 |
BWR A2+(SO)
(Reaffirmed ) |
NFB SubLimit | ST | (75.00) |
BWR A3(CE)
(Reaffirmation) |
28Jul2020 |
BWR A3 (CE)
() |
09May2019 |
BWR A2+(SO)
(Reaffirmed) |
09Feb2018 |
BWR A2+(SO)
(Reaffirmed) |
Grand Total | 300.00 | (Rupees Three Hundred 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.
Hyperlink/Reference to applicable CriteriaAnalytical Contacts | |
---|---|
Ajit S Jagnade Senior Manager - Ratings Board : +91 22 2831 1426, +91 22 2831 1439 ajit.j@brickworkratings.com |
Vidya Shankar Principal Director - Ratings Board : +91 80 4040 9940 vidyashankar@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 | Bank of Baroda | Letter of CreditSanctioned | _ | 300.00 | 300.00 | |
Sub-Limit (Bank Gaurantee) Sanctioned | (75.00) | |||||
Total | 0.00 | 300.00 | 300.00 | |||
TOTAL (Rupees Three Hundred Crores Only) |
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