Rating Rationale

Brickwork Ratings has reaffirmed the long-term ratings of "BWR BBB/Stable" for the bank loan facilities of Jagatpura World Centre LLP aggregating to Rs. 225.00 Crs.

The rating has factored, inter alia, the promoters vast experience in the real estate industry, favorable location and maintenance of DSRA and escrow accounts. However, the rating is constrained by the project execution risk, partnership nature of the firm and the risk associated with cyclicality in the real estate industry. However, Going forward, the ability of the firm to improve its financial risk profile, timely completion of project would be the key rating sensitivities.

The outlook continues to remain ‘Stable’ as BWR believes that the Jagatpura World Centre LLP 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 of timely completion of the project and the timely commencement of operations and the rating outlook may be revised to 'Negative' if any delay in the completion of the project and the commencement of operations.

For arriving at the ratings, Brickwork Ratings has relied upon the audited financial statements of the company for the last three years up to FY26, projected financials, along with publicly available information and management clarifications.

The terms of the sanction letter as stipulated are as follows:-

Post creation of Security, the borrower shall maintain security cover of 1.50 times the outstanding facility amount in the form of property/project during the entire tenure of the facility.

• Location Advantage :

  The project site is located within a developed area with a mix of residential and commercial establishments and is well connected by road, rail, and airways.

• Experienced Management and Established Track Record of the Promoters :

  Jagatpura World Centre LLP is promoted by Mr. Arpit Khandelwal (Valeo Investments Pvt Ltd) and Mr. Nirmal Kumar Agrawal (MS Emerging Estates LLP), both with over a decade of experience in operational management. Valeo specializes in developing and leasing prime office and commercial spaces, with investments of Rs. 206 crore in land and buildings, and a rental portfolio of Rs.71 crore as on March 31, 2024. MS Emerging Estates LLP focuses on LEED-certified, fully compliant developments on land acquired directly through government auctions.

• Maintenance of DSRA Account :

  Project revenues will be directed into a bank-maintained escrow account, with withdrawals governed by a predefined waterfall mechanism that prioritizes debt servicing. The firm is also required to maintain a Debt Service Reserve Account (DSRA) equivalent to three months of interest and principal repayments, which adds an extra layer of financial security.

• Project Execution Risk :

  Delays in execution may result in increased operating expenses and negatively impact revenue booking and overall profitability.

• Exposure to Inherent Cyclicality in the Real Estate Industry :

  The firm operates solely in Jaipur, Rajasthan, making it susceptible to fluctuations in the local real estate market, which is affected by macroeconomic trends. The reliance on a single geographic location adds to this risk.

• Partnership Constitution :

  As a partnership firm, Jagatpura World Centre LLP is exposed to risks associated with capital withdrawal by partners. This could impair financial and operational stability. Additionally, the firm is vulnerable to risks stemming from dissolution or changes in the partnership due to events like death or retirement of partners.

Going forward, the firm's ability to commence lease rentals in a timely manner by 31st December 2027, and subsequently achieve the projected rental revenues, will remain key rating sensitivities.

Positive: 

• Achieving 100% completion of the project construction by 30 September 2027.
• Timely receipt of customer advances with improved lease as per the schedule.
• Improvement in financial risk profile.

Negative: 

• Any delay in the project and any cost overrun will be negative for the ratings.
• Below 80% lease of the total leasable area in the project on or before June 30, 2028. 
• Significant delay in the disbursement of the committed line of funding.

• The firm’s liquidity position is adequate. The project is currently under construction, with a total estimated cost of ₹393.69 crore, funded through a term loan of ₹225.00 crore and promoter contribution of ₹168.69 crore. In the event of any delays in completing the capex, additional funding requirements are expected to be met by the promoters.
• The firm has no exposure to capital markets and relies solely on banks and financial institutions for its funding needs. As of FY26, it held cash and cash equivalents of ₹0.85 crore, in addition to fixed deposits worth ₹3.43 crore maintained with ICICI Bank and AU Small Finance Bank.
• The current ratio stands at 0.30x at present, primarily on account of the project being at a nascent stage. However, it is projected to improve significantly to 9.67x by FY28, supported by the commencement of operations post-DCCO (31 December 2027).
• Repayment obligations on the ₹225 crore term loan are scheduled to commence from the earlier of the Date of Commencement of Commercial Operations (31 December 2027) or the actual lease rental start date.
• The firm is expected to maintain sufficient cash inflows, supported by steady growth in lease bookings.
• Additional comfort is derived from the DSRA account balance, maintained in the form of fixed deposits with ICICI Bank.
• The facility is structured with a dedicated escrow account mechanism, wherein all lease rentals will be routed. The account will operate under a defined waterfall mechanism, ensuring priority-based allocation of funds in line with the agreed repayment and reserve requirements.
• Liquidity is expected to remain adequate, with an average DSCR of 1.43, and is likely to be maintained above unity throughout the tenure of the facility.
• The liquidity profile is further supported by the financial strength and resourcefulness of the promoter group.

Accordingly, the overall liquidity position is expected to remain adequate.

The company demonstrates an adequate ESG profile based on its environmental, social, and governance practices.

Environmental: The project includes plans for solar panels, a 250 KLD Sewage Treatment Plant, rainwater storage, and an organic waste converter. Environmental Clearance is approved, though Consent to Establish is pending.

Social: The company plans adequate worker welfare measures, including housing, PPE, first aid, and a crèche if needed. INR 5 lakh is budgeted for community social initiatives, though diversity metrics are not disclosed.

Governance: Structured as an LLP managed by two designated partners, traditional corporate board metrics (like independent directors) do not apply. The firm outlines adequate risk management strategies, but dedicated ESG committees are not mentioned

Jagatpura World Centre LLP, incorporated in January 2024, is undertaking the development of a premium commercial project at Pratap Nagar, Jaipur, Rajasthan.

The firm is promoted by Valeo Investments Pvt. Ltd. and MS Emerging Estates LLP, both of which have substantial experience in Jaipur’s real estate sector.The total estimated cost of the project is Rs. 393.69 crore, proposed to be funded through a sanctioned term loan of Rs. 225 crore, with the balance Rs. 168.69 crore to be contributed by the promoters.

The firm has two active designated partners Mr. Mayur Goyal and Mr. Ritul Jain and are based in Jagatpura, Jaipur.
The project, spread over a 2.33-acre site owned by the firm, will feature a single-tower development comprising basements, a retail mall on the Ground and First Floors, and modern office spaces across nine upper floors.

All major approvals, including those from the Rajasthan Housing Board, the State Level Environment Impact Assessment Authority, and the Consent to Establish from the Rajasthan Pollution Control Board (RPCB) have been obtained.

Site work has commenced, and financial closure was achieved in December 2024. The project is expected to be completed within 36 months, with lease rentals anticipated to commence by 31 December 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

Not Applicable.

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 an institutional investor in Brickwork.

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