Sparsh Infratech Pvt. Ltd.

Brickwork Ratings reaffirms/assigns the ratings for the Bank Loan Facilities of Rs.110.40 Crs. of Sparsh Infratech Pvt. Ltd.

Particulars

Facilities**	Amount (Rs.Crs.)		Tenure	Rating#
Facilities**	Previous	Present	Tenure	Previous (18 Feb 2021)	Present
Fund Based	70.00	110.40	Long Term	BWR BBB (CE)/Stable Reaffirmation	BWR BBB (CE) /Stable Reaffirmation
Grand Total	70.00	110.40	(Rupees One Hundred Ten Crores and Forty 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

The Ratings with the symbol CE are based on Credit Enhancement in the form of corporate guarantee from Bramha Corp Limited rated BWR BBB+/A2 Stable as on Feb 16, 2022. Unsupported rating of Sparsh Infratech Pvt Limited as assessed by BWR without considering the Credit Enhancement is BWR BB+.

RATING ACTION / OUTLOOK

Brickwork Ratings (BWR) reaffirms/assigns the rating of BWR BBB (CE) Stable for the bank loan facilities of Sparsh Infratech Private Limited.

The rating reflects established track record of promoters and company, location advantage, promoter funding via unsecured loans, increase in occupancy days resulting in rise in revenue and profits in current year FY2022 especially the last quarter wherein the occupancy has increased, constrained by the industry being exposed to cyclicality as well as low coverage ratios, however, the same is expected to improve in FY2023 and FY2024.
The rating also factors in the parent company, BramhaCorp Ltd support by way of corporate guarantee and letter of comfort ensuring funding of the account two days prior to the due date for SIPL to meet its payment of interest and principal obligations.

The Credit Enhancement (CE) is based on: Bramha Corp Ltd BWR BBB+/A2 Stable, a shareholder in SIPL and flagship co. of the group has provided an irrevocable, unconditional, and enforceable corporate guarantee for bank facilities of ‘Sparsh Infratech Pvt Ltd’.

Also, BWR has reaffirmed the standalone rating of BWR BB+.

KEY RATING DRIVERS

Credit Strengths:

Established track record of BramhaCorp Ltd (Corporate Guarantee provider) :
BramhaCorp Ltd (BCL) corporate guarantee provider is the flagship brand of the Bramha Group, which has its business interests in real estate, hotels, clubs, shopping complexes, land development etc mainly operating in Pune. BCL is rated as BWR BBB+ (Stable)/BWR A2.
Location Advantage :
Located amongst the Sahyadri mountain ranges and overlooking the Mulshi Lake. Atmantan aims to provide an integrated experience along with easy access to both Pune & Mumbai. With higher expected economic growth, and Corona vaccination, the business growth is expected to accelerate.
Support from Promoters :
The promoters have infused funds by way of share capital as well as interest free unsecured loans subordinated to bank facilities , ensuring a favourable capital structure largely consisting of promoter funds.
Financial profile :
The company has recorded revenue of Rs.23 crs in 9M Dec 2021 with EBITDA of Rs.12 crs. The profitability of the company has increased from 23% in FY2019 to 50% in 9M Dec 2021 which will support company to record positive PAT soon.
Facilities provided :
The company provides luxury vacation facilities along with wellness treatment at lower rates compared to other centres pan India. The property of the company is located at a location which is best suitable for wellness therapy. They offer wellness treatment such as Ayurveda Panchakarma, Yoga packages, Fitness programme, radiance ritual and many more.

Credit Risks:

Cyclical nature of the operations :
The tourism industry is directly linked to the economic conditions prevalent and thus, exposed to cyclicality, resulting in sales and realisations coming under pressure in an economic downturn ,mitigated by the fact that the climate of Pune being tropical in nature, the resort will be occupied throughout the year.
Low coverage ratios and PAT losses :
The company has recorded PAT losses in since last 2 years (FY2020 and FY2021) and expected to continue the same in FY2022 along with low coverage ratios. However, the losses have reduced to 60% of the losses recorded in FY2021 which will in turn improve its coverage ratios.

ANALYTICAL APPROACH - CE

For arriving at the ratings, BWR has considered the financials of Sparsh Infratech Private Limited and has applied the rating methodology as detailed in the Rating Criteria detailed below (hyperlinks provided at the end of this rationale).BWR has considered credit enhancement from Ms BramhaCorp Ltd. The‘ Credit Enhancement (CE)’ derived‘‘ Corporate Guarantee. BWR has also analysed SIPL’s rating on a standalone basis without considering credit enhancement and has arrived at the rating of BWR BB+ (Stable).

RATING SENSITIVITIES

Positive: The rating outlook for standalone rating may be revised to ‘Positive’ in case the revenues and profit and the company’s ability to effectively manage its working capital and debt protection metrics show sustained improvement. The rating outlook for the CE rating may be revised to positive in case there is sustained improvement in the financial performance of BramhaCorp Ltd.

Negative: The rating outlook for standalone rating may be revised to ‘Negative’ if the revenues and profitability deteriorated impacting overall debt protection metrics. The rating outlook for the CE rating may be revised to negative in case there is deterioration in the credit profile of BramhaCorp Ltd would be the key rating sensitivities.

LIQUIDITY INDICATORS - Adequate

Sparsh Infra: Liquidity position stands adequate in relation to size of business. The company has cash and cash equivalent of Rs.4.58 crs as on 28 Feb, 2022 and undisbursed loans of Rs.12.80 crs. The liquidity is also supported by interest free unsecured loans from promoters.

Bramha Corp: The liquidity position stands adequate. The Company’s liquidity position is marked by cash & cash equivalents of Rs.12.50 crs, Repayment for FY21 is Rs.45.50 crs and the Current ratio stood at 3.81x as on 31Mar2021. Also, the company has unutilised bank lines of Rs.300 crs (Term Loan undisbursed - Rs.237.50 and OD limits - Rs.63.27 crs). For FY2022 and FY2023, the CPTLD stands at Rs.46 crs and Rs.71 crs respectively with expected cash flows of ~Rs.70 crs and Rs.100 crs respectively which will be sufficient to take care of the debt obligation and the DSCR will be in the range of 1.4x to 1.5x.

ABOUT THE ENTITY

Sparsh Infratech Pvt Ltd (SIPL), established in 2007, is operating Atmantan Wellness Center, a health and wellness resort in Mulshi Taluka near Pune. In 2012, it undertook a project of 97 room luxurious resort, wellness & health spa comprising eco-friendly villas, cottages and deluxe rooms, presidential suites, a spa & fitness block, dining halls, juice bar, meditation hall, yoga pavilion, landscaped gardens etc. The company has built ‘Atmantan’ as a luxury wellness destination in Mulshi, near Pune with primary focus on fitness, detox and spa facilities amidst a surrounding of Sahyadri mountains. Mr. Nikhil Kapur & Mrs. Sharmilee Kapur are the main promoters.
It is part of BramhaCorp Ltd, Pune headquartered group having its presence in real estate development, hospitality, retail and leisure sectors.

KEY FINANCIAL INDICATORS (Standalone)

Key Parameters	Units	FY 20-21 (Audited)	FY 19-20 (Audited)
Operating Revenue	Rs.Crs.	13.31	21.09
EBITDA	Rs.Crs.	4.20	6.43
PAT	Rs.Crs.	-6.91	-6.36
Tangible Net Worth	Rs.Crs.	29.55	36.44
Total Debt/Tangible Net Worth	Times	5.96	4.38
Current Ratio	Times	0.87	1.04

KEY FINANCIAL INDICATORS (C.E)-Bramha Corp Limited

Key Parameters	Units	FY 20-21 (Audited)	FY 19-20 (Audited)
Operating Revenue	Rs.Crs.	236.88	331.05
EBITDA	Rs.Crs.	35.57	77.24
PAT	Rs.Crs.	4.22	20.81
Tangible Net Worth	Rs.Crs.	475.50	471.24
Total Debt/Tangible Net Worth	Times	1.97	1.95
Current Ratio	Times	3.81	4.40

RATING HISTORY FOR THE PREVIOUS THREE YEARS (including withdrawal and suspended)

Facilities	Current Rating (2022)			2021		2020		2019
Type	Tenure	Amount (Rs.Crs.)	Rating	Date	Rating	Date	Rating	Date	Rating
Fund Based	LT	110.40	BWR BBB(CE)/Stable (Reaffirmation)	18Feb2021	BWR BBB (CE)Stable (Reaffirmation)	28Feb2020	BWR BBB (CE)Stable (Reaffirmation)	25Feb2019	BWR BBB (SO)Stable (Reaffirmation)
Grand Total		110.40	(Rupees One Hundred Ten Crores and Forty lakhs Only)

Rating Advisory, as on 18Feb2022
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
Heta Mehta Senior Manager - Ratings Board : +91 22 2831 1426, +91 22 2831 1439 heta.m@brickworkratings.com	Bal Krishna Piparaiya Senior Director - Ratings Board : +91 22 2831 1426, +91 22 2831 1439 piparaiya.bk@brickworkratings.com
1-860-425-2742 \| media@brickworkratings.com

Sparsh Infratech Pvt. 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	JM Financial Credit Solutions Limited	Term Loan - Sanctioned	45.00	_	45.00
2	Tourism Finance Corporation of India Limited	Term Loan - Sanctioned	65.40	_	65.40
Total			110.40	0.00	110.40
TOTAL (Rupees One Hundred Ten Crores and Forty lakhs Only)

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