Thapar Institute of Engineering & Technology

Brickwork Ratings has removed the rating from Issuer not Cooperating Category, upgrades the long-term rating for the Bank Loan Facilities of Rs. 216.00 Crs. of Thapar Institute of Engineering & Technology.

Particulars

Facilities**	Amount (Rs.Crs.)		Tenure	Rating#
Facilities**	Previous	Present	Tenure	Previous (23 Sep 2024)	Present
Fund Based	126.35	216.00	Long Term	BWR BB+ /Stable Continues to be in ISSUER NOT COOPERATING* category/Downgraded	BWR BBB + /Stable removal from ISSUER NOT COOPERATING* category/Upgraded
Grand Total	126.35	216.00	(Rupees Two Hundred Sixteen Crores 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 revision of the ratings assigned for the bank loan facilities of Thapar Institute of Engineering & Technology has factored the improved financial risk profile and a comfortable gearing level. The institution also draws strength from experience of the management, healthy order book position and a healthy debt protection metrics and also by considering the improvement in revenues, an adequate liquidity position, an achievable projection and an established track record.

BWR believes the Thapar Institute of Engineering & Technology business risk profile will be maintained over the medium term. The 'Stable' outlook indicates a low likelihood of rating change over the medium term. The rating outlook may be revised to 'Positive' in case the revenues and profit show sustained improvement. The rating outlook may be revised to 'Negative' if the revenues go down and profit margins show lower than expected figures.

KEY RATING DRIVERS

Credit Strengths:

Long track record of operations with an established brand name and deemed university status : :
TIET was established in 1956. Since then it has been engaged in the imparting of higher education primarily in technical fields. In 1985, the institute was conferred with the ‘deemed to be university status by the UGC. TIET is NAAC A+ rated and a recipient of various awards and recognition from GOI. Currently, TIET offers over 40 courses which AICTE primarily approves. It has credit transfer programmes in collaboration with Trinity College of Dublin, University of Groningen, Tel Aviv University and Virginia Tech USA. TIET also has tie-ups with foreign universities for student & faculty exchange programs, training programs and projects. Additionally, due to its long presence and established academic record, TIET has a good placement record with reputed industry players.
Consistent increase in total operating receipts (TOR) : :
TOR has been consistently increasing since the last three FYs mainly driven by increased GER for management & engineering courses. The TOR of the TIET have increased by 21 % of Rs. 518.78 Crores in FY 24 when compared to Rs. 427.93 Crores in FY 23. Owing to increase in Gross enrollments YOY coupled with consistent increase in Fee Structure of TIET. Further, TIET also derives revenue from the hostel income, income from facilities provided, income enterprises activities which has also contributed to its increased revenue receipts.
Increased SBITDA : :
Over the past 3 FYs, TIET has been generating more than adequate SBITDA y-on-y. Further in % terms the OSM has marginally increased to 20.31 % in FY24 from 19.63% in FY23. OSB (Net Profit) has been increased to Rs. 132.63 Crores in FY 24. The trust's EBITDA stood at Rs. 253.24 Crores in FY24 audited financial statements.
Comfortable Debt Protection Metrics : :
TIET has a comfortable debt protection metrics indicated by ISCR and DSCR of 11.71x and 5.69x in FY 24, as TIET has increased its external borrowing.

Credit Risks:

Intense competition : :
The education sector is highly fragmented as many small and large private institutes offer similar kinds of courses in north India. There is a lower demand for some courses due to high competition and lower placements
Highly regulated nature of the education sector : :
The Indian education sector comes under the purview of both the central and the state governments. It is regulated by the Ministry of Human Resources at the national level, the education ministries in each state, central bodies like University Grants Commission (UGC) and other professional councils like All India Council for Technical Education, etc. Due to TIET’s deemed university status, it has relatively high autonomy in conducting examinations, admission procedures, and deciding syllabus. However, the status also necessitates compliance with UGC norms with award of grants, intake approvals etc.

ANALYTICAL APPROACH - Standalone

As TIET does not have any subsidiary and there is no consolidation, Standalone approach has been followed.

RATING SENSITIVITIES

Going forward, the ability of the society to report healthy enrolment ratios and steady growth in student strength, improvement in overall credit risk profile and efficient management of working capital requirements would be the key rating sensitivities.

Positive: The ratings may be upgraded if there is consistency in maintaining the healthy financial risk profile marked by comfortable capital structure and substantial improvement in debt protection metrics, besides other factors favoring an upgrade.

Negative: The ratings may be downgraded if there is a decline in operating income and/or profitability due to decline in enrolment ratio or any moderation in debt coverage indicators.

LIQUIDITY INDICATORS - Adequate

The company’s liquidity position remains adequate. As of March 31, 2024, the company’s cash and cash equivalents stood at approximately Rs. 45.37 Crores and Cash Accruals of Rs.231.61 Crores in FY 24. The trust's SBITDA stood at Rs.253.24 Crores in FY24 audited financial statements against the interest and finance charges of Rs. 21.63 Crores. The liquid cash availed with the TIET was sufficient enough to repay the debt repayment obligation. Further the SBITDA stood more than adequate to service the interest obligations year on year and the capex in process is not likely to impact the liquidity position of the society.

ABOUT THE ENTITY

Macro Economic Indicator	Sector	Industry	Basic Industry
Consumer Discretionary	Consumer Services	Other Consumer Services	Education

Thapar Institute of Engineering and Technology (TIET) was established under the Thapar Educational Trust (TET) in 1956 by the late Mr. Karam Chand Thapar. The trustees are managing the deemed to be university- TIET. The university is engaged in imparting higher education since 1956. Subsequently, in 1985, the Thapar University Act was passed and the institute was ‘deemed to be a university’ by UGC and the institute was named ‘Thapar University’. However, in FY17, it was renamed again as ‘Thapar Institute of Engineering and Technology’ (TIET) after UGC barred ‘deemed to be universities’ from using the word “University” in their names. The major operations of the university are being managed from its Patiala (Punjab) campus. At this campus, it offers graduate and post-graduate courses in engineering, sciences, management etc. along with doctoral courses for these streams. In addition, the university also operates an off-campus center by the name LM Thapar School of Management in Dera Bassi, Punjab since 2007.

KEY FINANCIAL INDICATORS (Standalone)

Key Parameters	Units	FY 21 - 22 (Audited - Annual)	FY 22 - 23 (Audited - Annual)	FY 23 - 24 (Audited - Annual)
Operating Revenue	Rs.Crs.	423.29	554.96	656.89
EBITDA	Rs.Crs.	145.77	217.65	253.24
PAT	Rs.Crs.	54.62	113.88	132.63
Tangible Net Worth	Rs.Crs.	632.61	747.94	884.97
Total Debt / Tangible Net Worth	Times	0.27	0.32	0.29
Current Ratio	Times	0.63	0.72	0.76

KEY COVENANTS OF THE FACILITY RATED

The terms of sanction of the rated facilities include standard covenants normally stipulated for such facilities, however there is special covenants on TOL/TNW , Debt/EBIDTA and DSCR which are complied by TIET.

STATUS OF NON-COOPERATION WITH PREVIOUS CRA

Creadit Rating Agency Status and Reason for Non-Cooparation Date of Press Release
CARE In the absence of adequate information from the trust 30Sep2024

Creadit Rating Agency	Status and Reason for Non-Cooparation	Date of Press Release
CARE	In the absence of adequate information from the trust	30Sep2024

ANY OTHER INFORMATION

No Other Information.

RATING HISTORY FOR THE PREVIOUS 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	216.00	BWR BBB+/Stable (removal from ISSUER NOT COOPERATING* category/Upgraded)	29Mar2024	BWR BBB Stable (ISSUER NOT COOPERATING* /Downgrade)	NA	NA	29Dec2022	BWR BBB+ Stable (Upgrade and Removed from the INC category)
		0.00	NA	23Sep2024	BWR BB+ Stable (Continues to be in ISSUER NOT COOPERATING* category/Downgraded)	NA	NA	NA	NA
Grand Total		216.00	(Rupees Two Hundred Sixteen Crores Only)

Hyperlink/Reference to applicable Criteria

Analytical Contacts
R Sriranjani Rating Analyst sriranjani.r@brickworkratings.com	V Ramachandra Director - Ratings ramachandra.v@brickworkratings.com
1-860-425-2742 \| media@brickworkratings.com

Thapar Institute of Engineering & Technology

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.)	Complexity of the Instrument
1	HDFC Bank	Term Loan - Out-standing	33.75	_	33.75	Simple##
2	HDFC Bank	Term Loan - Out-standing	_	_	0.00	Simple##
3	HDFC Bank	Term Loan - Out-standing	_	_	0.00	Simple##
4	HDFC Bank	Term Loan - Out-standing	_	_	0.00	Simple##
5	HDFC Bank	Term Loan - Out-standing	7.50	_	7.50	Simple##
6	HDFC Bank	Term Loan - Out-standing	25.00	_	25.00	Simple##
7	HDFC Bank	Term Loan - Out-standing	76.00	_	76.00	Simple##
8	HDFC Bank	Term Loan - Out-standing	13.75	_	13.75	Simple##
9	HDFC Bank	Working Capital Demand Loan - Sanctioned	15.00	_	15.00	Simple##
10	ICICI Bank	Over Draft - Sanctioned	30.00	_	30.00	Simple##
11	Punjab National Bank	Over Draft - Sanctioned	15.00	_	15.00	Simple##
Total			216.00	0.00	216.00
TOTAL (Rupees Two Hundred Sixteen 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.

ANNEXURE-II

INSTRUMENT DETAILS

Instrument	Issue Date	Amount (Rs.Crs)	Coupon Rate (%)	Maturity Date	ISIN Particulars	Complexity of the Instrument
Nil	Nil	Nil	Nil	Nil	Nil	Nil

ANNEXURE-III

List of entities consolidated

Name of Entity	% Ownership	Extent of consolidation	Rationale for consolidation
Nil	Nil	Nil	Nil

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