Rating Rationale

Brickwork Ratings has assigned a long-term rating of BWR BB/Stable to the bank loan facilities aggregating Rs. 73.00 crore of IHLD Hospital Services Pvt Ltd.

The rating factors in the strategic location of the project, favourable demand outlook for the healthcare sector supporting the ramp-up of operating metrics post commencement, and the extensive experience of the promoters with an established regional presence. These strengths are, however, partially offset by the execution risk associated with timely completion of the project and susceptibility to geographic concentration in revenues. Going forward, the entity’s ability to ensure timely project execution, achieve occupancy and revenue levels in line with projections, and maintain healthy cash flows and debt protection metrics will remain key rating sensitivities.

The Stable outlook reflects Brickwork Ratings’ expectation that the entity will maintain its business and financial risk profile over the medium term, supported by timely project execution and achievement of the envisaged occupancy and revenue levels. The outlook may be revised to Positive if the entity demonstrates sustained progress in project execution, achieves occupancy and revenue levels in line with or better than projections, and records an improvement in its overall financial risk profile. Conversely, the outlook may be revised to Negative in case of significant delays in project execution, deterioration in the financial risk profile, weakening liquidity, or adverse regulatory or operational developments affecting project implementation.

For arriving at the rating, Brickwork Ratings has relied upon the audited financial statements for the last three years up to FY25, provisional financials for FY26, projected financials for FY28 to FY36, publicly available information, and clarifications provided by the management.

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

• Strategic location; healthy demand outlook for the healthcare sector to aid operating metrics ramp-up post commencement :

  The hospital is located in Gurgaon, a densely populated residential & commercial catchment, which is expected to support healthy operating metrics once operations commence. Additionally, the demand outlook for healthcare services remains favourable, driven by factors such as rising affordability, increasing medical insurance penetration, growing health awareness, under-penetration of quality healthcare services, and technological advancements enabling early diagnosis and improved treatment outcomes.

• Extensive experience of the promoters and established regional presence :

  he company is promoted by Dr. Rahul Chandola, a cardiothoracic, heart and lung transplant surgeon, along with Dr. Dishant Dabas and Dr. Ali. The promoters’ extensive healthcare industry experience is expected to support the company’s understanding of market dynamics and strengthen its regional presence in Gurugram. IHLD currently provides specialised cardiac and pulmonary services to hospitals through dedicated facilities, including at PSRI Hospital under a three-year contract, which is presently under renewal. IHLD has a specialised team of 30 personnel at PSRI, while the medical equipment is provided by PSRI, supporting its asset-light operating model.

• Exposure to risks related to the ongoing project :

  The company is currently setting up a 67-bed super specialty hospital in Gurgaon at a cost of around Rs. 109.83 crores. The project is being funded through term debt of Rs 73 crore and the promoter’s contribution of around Rs 36.83 crore. With land being acquired and necessary approvals already in place, construction of the hospital is already in progress and operations are expected to commence in October 2027.  Timely completion without any cost overrun remains monitorable.

• Susceptibility to geographic concentration in revenue :

  As the company only operates within the vicinity of the Gurgaon region, its revenue remains susceptible to market dynamics and government regulations of that region. The company will also remain exposed to competition from other major hospitals in the region, the impact of which remains to be seen.

Positive Triggers:
The rating may witness a positive action upon timely project completion by Oct 2027, receipt of all requisite approvals, and achievement of occupancy and revenue levels in line with projections, supported by healthy cash flows and debt protection metrics.

Negative Triggers:

The rating may face downward pressure in the event of project delays, cost overruns exceeding 10%, or funding shortfalls, resulting in weaker project viability and debt servicing capability. Lower-than-expected occupancy and revenue ramp-up, along with any deterioration in liquidity, would also remain key negative sensitivities.

Liquidity is expected to remain adequate, supported by a current ratio of 1.02x, which is considered reasonable given that the project is still at a nascent stage. The repayment of the term loan is scheduled to commence from October 2027, providing an adequate moratorium during the construction phase. Further comfort is derived from the maintenance of a Debt Service Reserve Account (DSRA) equivalent to three months’ interest obligations. In addition, the projected average DSCR of 1.33x, with debt service coverage remaining above unity throughout the loan tenure, is expected to support the timely servicing of debt obligations

The company's ESG profile demonstrates an Adequate profile across environmental, social, and governance dimensions, considering the nature of its proposed healthcare operations.

Environmental: The project includes a 90 KLD STP, rainwater harvesting and reuse of treated water.

Social: The hospital will provide specialised healthcare services, including emergency care, critical care, CTVS and dialysis. The company proposes 128 employees initially, increasing to 171 with higher occupancy.

Governance: The company is promoted by Dr. Rahul Chandola and Ms. Tanushree Chandola, with Dr. Chandola having significant healthcare experience

IHLD Hospital Services Private Limited (IHSPL), incorporated in July 2023, is setting up a 67-bed super specialty hospital in Gurugram, Haryana. The company is promoted by Dr. Rahul Chandola and Ms. Tanushree Chandola.

The hospital is proposed to be developed on a 1.96-acre plot, with a total built-up area of around 1,52,902 sq. ft., comprising two basements, ground plus three floors. The facility will offer specialised cardiac and tertiary healthcare services, including emergency services, CTVS and modular operation theatres, critical care, dialysis and diagnostic facilities.

The total project cost is estimated at Rs. 109.83 crore, proposed to be funded through a sanctioned term loan of Rs. 73.00 crore and promoter contribution of Rs. 36.83 crore. Construction commenced in October 2025, with commercial operations targeted by October 2027

The Complexity Indicator refers to the ease with which the returns associated with the rated instrument could be estimated. It does not indicate the risk related to the timely payments on the instrument, which is rather indicated by the instrument's credit rating. It also does not indicate the complexity associated with analysing an entity's financial, business, industry risks or complexity related to the structural,transactional or legal aspects. Details on the complexity levels of the instruments are available on BWR's website Complexity Levels.

Not Applicable

NA

BWR Board of Directors have no influence over rating decisions, nor do they sit on the rating committee or review, discuss or evaluate any credit rating during the Board meetings.

Brickwork Ratings (BWR), a Securities and Exchange Board of India [SEBI] registered Credit Rating Agency and accredited by Reserve Bank of India [RBI]. BWR is the 5th agency to get a credit rating registration in India in 2009 and its corporate office in Bengaluru. It has a country-wide presence with representatives in 150+ locations. Canara Bank is our institutional investor.

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