Rating Rationale

BWR has assigned  rating of BWR A+(Stable) for fund-based facilities aggregating Rs 180.92 Crs. The rating factors in rating strengths such as an experienced promoter group, substantial scale and track record at Group Level,  Build-to-suit business model, expected stable cash flow on account of marquee tenants with long lease tenure, and a location advantage; and a healthy financial risk profile; however, it factors in rating weaknesses such as exposure to project implementation risk and  tenant concentration risk, and susceptibility to volatility in occupancy and interest rates.

Outlook- The stable outlook is assigned to the long-term ratings as the company is expected to benefit from the timely receipt of Lease rentals from the counterparty as well as the operational and financial strength of the promoter Group, which is Oswal and Nahar Group

There are standard covenants as per the Sanction Letter

• Experienced promoter group :

   KMRA Associates LLP  benefits from the Oswal Group's 30+ years of domain experience in textiles and further diversification into real estate (e.g., OWM Logipark Varanasi LLP,  Logipark Patna Private Limited, and Bhubaneshwar Logipark Private Limited, providing a strong market reputation and key client relationships. Development and Leasing advisory for group companies are supported by leading global consultants, including CBRE, Cushman & Wakefield, JLL, and Knight Frank.

• Substantial scale & track Record of Oswal Group in the Real estate segment :

  The group has multiple SPV’s in Real estate with a total area of 10.4Mn square feet in the pipeline. ~5.4 million square feet area is delivered as of Sep 2026; 4.1 Mn square feet is under construction, 100% pre-leased, and expected to be delivered by Dec 2027; 0.9 million square feet has an advance order book, for which final delivery is expected by 2028. Thus, 9.5 million square feet is expected to be delivered by Dec 2027,13.5 million square feet is targeted by Dec 2028, out of which ~10.4 million square feet is already contracted. In value terms, Rs 312 Crs is contracted annual lease rent. Delivered is Rs 152 Crs, under construction is Rs 131 Crs, advance order book of Rs 29 Crs. The group has reputed tenants such as Flipkart, Blinkit, Amazon, Zomato, and Snoman Logistics. The Group has a presence in 10 states, 18 Logistic Parks, 49 Logistic Boxes. The average tenure of lease is 9 years, with a lock-in period of 6 years and 4% p.a. annual escalation. There is 7.8 years WALE for the delivered portfolio; 96% of the area expires after 2033. There is 100% occupancy as the business model is Build-to-Suit (BTS) by design, in which the group operates. Overall, the group's real estate revenue is expected to increase from Rs 22.24 Crs in Sep 2022 to Rs 404.66 Crs in December 2028.

• Business Model of Built-to-Suit & Cash Flow Stability : :

  Operating predominantly on a Built-to-Suit (BTS) model ensures full utilization from inception, while long-term lease structures provide high revenue visibility and predictable cash flows over the tenure of the Loan.

• Expected stable cash flow on account of marquee tenants with long lease tenure and Location advantage :

  The portfolio benefits from marquee e-commerce and logistics tenants bound by long-term 9-year lease agreements with a 6-year lock-in period, ensuring reliable and steady rental yields. The company has warehouses in  Jaipur, Lucknow, and  Guwahati, which are established warehousing and logistics hubs catering to e-commerce and consumer durables. These warehouses are paired with modern infrastructure, positioning these facilities to maintain high occupancy and seamlessly support upcoming warehouse expansions.
  The Group also has the Varanasi facility in Uttar Pradesh through Group entity OWM Logipark Varanasi LLP, which leverages proximity to the trade-heavy NH-19 (Agra–Kolkata) corridor. Together, these strategic locations and superior asset quality position the firm for strong tenant demand and future leasing growth.

• Healthy financial risk profile : :

  The financial risk profile is healthy, with average DSCR expected to remain comfortably above 1.86 times for FY 23-37. Debt protection metrics also derive comfort from the maintenance of a debt service reserve account (DSRA) equivalent to three months/One Quarter of debt obligations of Rs 10 Crs

• Exposure to project implementation risk :

  The firm is exposed to project implementation risks as the SPV is developing a 3,95,092 sft area, with the lease expected to commence from Sep 2027 to Jan 2028. The Financial closure of the same has not taken place. Nevertheless, demand risk is mitigated with pre-leasing of the entire leasable area. However, any significant delay in project execution or cost overrun may impact the financial risk profile and will be a key rating monitorable, as BWR has not factored the same into cash flows, as this is a nascent stage.

• Exposure to tenant concentration risk :

  The entire leasable area is occupied by single tenants, exposing the company to tenant concentration risks. Surrender of the lease by the tenants will significantly weaken the financial risk profile. However, this risk is mitigated by lease agreements of nine years. Additionally, the lock-in period of six years mitigates the risks to some extent. However, some of the lease agreements have a remaining lock-in period until Sep 2028, which may lead to vacancy risk. Cash flow from these assets over the remaining tenure of the lease will be key rating moniterables

• Susceptibility to volatility in occupancy and interest rates :

  India's warehousing sector is inherently cyclical, making cash flows sensitive to interest rate volatility and shifts in occupancy. During economic downturns, rental collections—the company's primary revenue source—can face pressure from weakened tenant demand, while intense competition risks can affect rental rates and tenant retention. Nevertheless, current cash inflows are sufficient to absorb these operational and interest rate fluctuations, though cash flow stability will be closely monitored.

Positive Rating Drivers (Upward Triggers)

• Prepayment / De-leveraging: Accelerated debt payoff improving DSCR continuously above 1.50x.

• Higher-than-expected rental income,  strengthening surplus generation, leading to improvement in the  overall financial risk profile

Negative Rating Drivers (Downside Triggers)

• Vacancy Risk / Tenant Non-Renewal: Higher-than-anticipated vacancy during re-leasing windows, or significant increase in debt, impacting the debt protection metrics, pushing DSCR below 1.10x.
• Non-compliance with  DSRA maintenance.
• Decline in occupancy to below 90-95%, leading to lower-than-expected rental income

As of Aug 2026, the company had created and maintained a DSRA of Rs 10 Crs, equivalent to one quarter of the principal and interest payment as required by the financing documents. The company is expected to generate cash accruals of Rs ~38.49 Crs in FY 27  with repayment obligations of Rs 9.38 Crs in FY27. Further, there is adequate cash flow and a debt service coverage of over 1.28x  over  FY27-28. Further, the presence of strong promoters adds to financial flexibility and provides comfort.

Based on the assessment, the entity’s ESG profile is not expected to materially affect its creditworthiness

KMRA Associates LLP is an active Limited Liability Partnership incorporated in July 2021. It is associated with the Oswal / Nahar Group, a prominent Indian business conglomerate operating in textiles, financial services, real estate, and renewable energy. The partners are prominent directors and promoters across various group entities, including Nahar Industrial Enterprises, Oswal Woollen Mills, and Monte Carlo Fashions.. KMRA  Associates LLP is in commercial real estate operations and has leased out ~1,572,838  square feet of area to  Instakart Services Private Limited, and all the projects are completed in SPV

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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]. 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 an institutional investor in Brickwork.

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