IVY Hotels and Resorts

Brickwork Ratings assigns the ratings for the Bank Loan Facilities of Rs. 43.42 Crs. of IVY Hotels and Resorts

Particulars

Facilities**	Amount(Rs.Crs.)	Tenure	Rating#
Fund Based	43.42	Long Term	BWR BB - /Stable Assignment
Grand Total	43.42	(Rupees Forty Three Crores and Forty Two 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 reflects the under-construction stage of IVY Hotels and Resorts a five-star hotel with 90 key rooms located at Dehradun, Uttarakhand. The construction of the hotel has not yet commenced and the management has informed the agency that the commercial operations will commence from Apr 2028, BWR however expects the scale of operations to remain small over the medium term, owing to the initial risk associated with occupancy. 

BWR has assigned the long-term rating BWR BB- with a Stable Outlook for the bank loan facilities of Rs 43.42 Crs of IVY Hotels and Resorts. 

The rating has been assigned to the above-mentioned bank facilities of IVY Hotels and Resorts, which continues to draw comfort from extensive experience of promoters,  its Location advantages and Brand Recognition. The rating is however constrained by project Execution risk related to timely completion and budgeted construction cost and competition in the hospitality industry. 

A financial summary is not available as the firm has not yet commenced operations.

KEY RATING DRIVERS

Credit Strengths:

• Extensive experience of the management :

  The firm is formed by members of the same family, Mr, Mohd. Illyas , his wife, Mrs. Alam Jahan, 2 sons i.e. Mr. Javed Khan and Mr. Faisal Iqbal. Mr. Mohd Illays aged 80 years is having 2 deceased of experience in the hotel industry and will be looking after the admin management and it's operations.  Mrs. Alaam Javed (wife of Mr. Mohd. Illays aged 63 years is also in the hotel industry and he looks at the management of the operations. Their son, Mr. Javed and Mr. Faisal aged 40 and 36 years looks after the marketing and other overall management. They have successfully set up and managed 2 hotels in Dehradun namely Seyfert Sarovar, a premier 5 star hotel and Sarovar Portico. 

• Favourable Location :

  Dehradun being the capital of Uttarakhand is located in northern Indian region of Himalayas and is surrounded by Shivalik ranges of mountains on one side and Ganges river on other side with a Scenic beauty. Every round the year, tourist from all over Idia and abroad visit Dehradun for various reasons like spiritual, holiday, leisure, official or adventure activities. Dehradun and it's surrounding areas is known for hill station, meditation, spiritualism, vacations etc. It is always crowded with tourist fro enjoying nd relaxing activities. The location of the proposed hotel is easily accessible and has quiet landscape of Dehradun which would be an attraction to tourist as the same is located just below the Mussorie Hills. 

• Brand Recognition :

  The firm has proposed the construction of a five-star hotel with 90 rooms in Dehradun, Uttarakhand. The firm has entered into a 20-year agreement with IHG Hotel and resorts for running a hotel under the brand name of "Crowne Plaza" . As a result, the firm benefs from the goodwill associated with the the brand. IHG Hotels is a Leading global hotel company with 18 brands located in over 100 countries & territories. Their brand - " Crowne Plaza Hotels and Resorts" have 407 branches worldwide 

Credit Risks:

• Competition in the Industry :

  The Indian subcontinent, with vast opportunities and potential for high growth, has become the focus area for major international hotel chains. Several of these chains have already established hotels, while others have their plans to establish to to take advantage of these opportunities. The entry of these chains is expected to intensify the competitive environment. BWR believes that the success of the company will depend on its ability to compete in areas such as room rates, quality of accommodation, service levels, convenience of location, and the quality and range of other amenities, including food and beverages.

• Execution risk related to timely completion and budgeted construction cost : :

  IVY Hotels and resorts had planned to complete the construction of the hotel by 31 Dec 2028 and commence its operations by Jan 2029. Timely completion of the projects would be key monitorable for the firm and the firm any delay in such would lead to high costs for the firm. As of Dec 2024, only the land has been acuired. The construction cost remains to be incurred, any increase in such cost will lead to lower profitability and cash flows for the firm, affecting the debt serviceability for the firm. BWR believes that any time or cost overrun in the projects will affect the debt serviceability of the projects. 

ANALYTICAL APPROACH

Standalone - 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

Going forward, the ability of the firm to timely commence operations in Jan 2029 and the subsequent achievement will remain the key rating sensitivities.

Positive: The ratings may be upgraded with the timely completion of the project, the timely commencement of operations as per milestone dates and with minimal cost escalations which is to be borne by the promoters.

Negative: The ratings may be downgraded in case of any delay in the completion of the project / commencement of operations by 6 months and/or if the Promoters dilute / relinquish their stake in the project before its commencement of operations.

 

LIQUIDITY INDICATORS - Adequate

The firm's liquidity position is Adequate: The Hotel is under construction total cost of the project is 82.16 cr with a term loan of Rs 45.90 crore and the remaining through the Promoter contribution. the promoters contribute in the form of capital of Rs 36.26 cr and nil unsecured loans. In the event of a delay in capex completion, the expenses will be funded by the promoters. The firm does not have any capital market exposure and relies on banks and financial institutions to meet its funding requirements. The firm will have repayment obligations for the term loan of Rs 43.42 Crs repayments starting from Feb 2027. 

ABOUT THE ENTITY

M/s IVY Hotels and Resorts(PAN: AAKFI3933Q) is a partnership firm managed by four partners: Mr. Mohd. Ilyas, Mrs. Alam Jahan, Mr. Javed Khan, and Mr. Faisal Iqbal. The firm was formed on 25 Oct 2023. The firm operates with its registered office located at 56, Rajpura Road, Dehradun, Uttarakhand. The entity is undertaking a greenfield project to establish a hotel at Mussoorie Road, Dhakpatti, Rajpura Road, Dehradun, Uttarakhand.The land for proposed hotel has already been identified and agreement to purchase the same has been executed. The proposed hotel shall have 90 guest rooms, 2 restraunts of 70+50 people and a banquet hall of 8000 sq ft area with capacity of 600 people. The total cost of the project is expected to be Rs. 82.16 cr which will be financed by loan from bank for Rs. 45.90 cr and promoter's margin for Rs. 36.26 cr. Out of the total cost of project for Rs. 82.16 cr, the land cost shall be Rs. 24.50 cr and the building cost shall be Rs. 25.29 cr. 

KEY COVENANTS OF THE FACILITY RATED

1. DSRA(Debt Servicing Retention Account) is maintained prior to disbursement of TL equivalent to 3 months interest in the account.Further,post DCCO,DSRA equivalent to 3 months interest and 3 moths principal to be maintained for the TL account. DSRA should be periodically updated with change in interest in the TL account as per extant guidelines. 
   1. Borrower to submit an undertaking that out of the promoter's contribution, at least 50%should come by way of equity in case of project loan.Further,at each stage of disbursement,branch to ensure to maintain project DER of 1:12:1. 
2. Rest Standard covenants applicable

STATUS OF NON-COOPERATION WITH PREVIOUS CRA

Not Applicable

ANY OTHER INFORMATION

Nil

RATING HISTORY FOR LAST THREE YEARS (including withdrawal and suspended)

Facilities	Current Rating  (2025)			2024		2023		2022
Type	Tenure	Amount (Rs.Crs.)	Rating	Date	Rating	Date	Rating	Date	Rating
Fund Based	LT	43.42	BWR BB-/Stable (Assignment)	NA	NA	NA	NA	NA	NA
Grand Total		43.42	(Rupees Forty Three Crores and Forty Two lakhs Only)

Hyperlink/Reference to applicable Criteria

• General Criteria
• Approach to Financial Ratios
• Services Sector

Analytical Contacts
Vaishali Khandelwal Rating Analyst vaishali.k@brickworkratings.com	Hari Kishan Yadav Associate Director - Ratings hari.ky@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.)	Complexity of the Instrument
1	Union Bank of India	Term Loan	43.42	_	43.42	Simple##
Total			43.42	0.00	43.42
TOTAL (Rupees Forty Three Crores and Forty Two 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.