Whispering Heights Real Estate Private Limited

Transcription

1 Rating Rationale 19 Sep 2018 Whispering Heights Real Estate Private Limited Brickwork Ratings reaffirms ratings for the Non-Convertible Debentures amount of Crores of Whispering Heights Real Estate Private Limited (WHREPL) Particulars Instrument Issue Date Previous ( Crores) Present ( Crores) Coupo n Maturi ty Date ISIN Particulars Previous Rating (Sep 2017) Present Rating* NCDs 18th Sep (Proposed) (Issued) 13.00% 17th Sep 2037 INE290W (Pronounced as BWR Triple B Minus (Structured Obligation)) (Outlook: Stable) (Pronounced as BWR Triple B Minus (Structured Obligation)) (Outlook: Stable) (Reaffirmed) Total (INR One Hundred and Fifty Six Crores Only) *Please refer to BWR website for definition of the ratings Rationale: The rating continues to factor inter alia, the experience of shareholders of Whispering Heights Real Estate Private Ltd (WHREPL) i.e. promoters of K Raheja Corp & RECO Solis Pvt. Ltd. (100% step down subsidiary of GIC Realty Pvt Ltd, which is owned by the Government of Singapore) in real estate space as a developer and investor respectively; favourable location of the project in Worli, Mumbai on which a 16 storeys commercial tower with a total area of 5.1 lac sq.ft is proposed to be built for leasing out to corporates; long tenor of NCDs with a structured repayment mechanism. The rating is however constrained by the fact that the project is at a nascent stage resulting in project execution risk and uncertainties about the occupancy rate & lease rentals in the proposed commercial tower Sep 2018

2 The rating with subscript SO takes into account the structured coupon payment mechanism of the issue wherein there is provision of coupon payment subjected to the availability of distributable cash flow. Description of Key Rating Drivers Credit Strengths: Experienced shareholders: K Raheja Corp is a Mumbai based real estate developer with six decades of experience in the real estate space. It develops various commercial & residential properties, malls, retail stores, hotels etc. in cities like Mumbai, Bangalore, Coimbatore, Chennai, Pune, Hyderabad, Goa, Gandhinagar etc. The other shareholder RECO Solis Pvt. Ltd., which is 100% owned by Recosia Pvt. Ltd. which is 100% owned by GIC Realty Private Limited, Singapore, which is 100% owned by Govt. of Singapore. GIC Realty Private Limited was formerly known as Government of Singapore Investment Corporation (Realty) Pte Ltd and was established by the Government of Singapore in GIC Realty Private Limited has investments in various real estate assets across Asia. There is Letter of Comfort from the current shareholders that they will maintain majority interest in WHREPL till the NCDs amount remains outstanding. Favourable location of the project: The proposed project is located in the Worli area of South Mumbai, which is one of the key commercial hubs of the city. Excellent connectivity and proximity to large premium retail space & hotels makes the location attractive. Long tenor of the instrument : The NCDs have a tenor of 20 years from the date of allotment with 13% coupon which will accrue annually. Accrued coupon will be payable only to the extent distributable cash flow is available with the company. There is a moratorium on the coupon payment till the Occupation Certificate (OC) of the commercial building is received(expected in FY19-20). Payment of coupon will begin from April,1 of the following year of the OC receipt. Credit Risks: Nascent Stage of the project: Project is at its nascent stage with demolition work of the existing buildings in progress and few approvals are under process. The construction shall start after the completion of demolition process. Uncertainty about occupancy rate and lease rent: The company is yet to execute lease rental agreements with prospective tenants for the proposed commercial complex. Analytical Approach For arriving at its rating, BWR has applied its rating methodology as detailed in the Rating Criteria detailed below (hyperlinks provided at the end of this rationale) Sep 2018

3 Rating Outlook: Stable BWR believes the Whispering Heights Real Estate Private Limited business risk profile will be maintained over the medium term. The Stable outlook indicates a low likelihood of rating change over the medium term. Progress of the construction as per the schedule will be a key rating sensitive factor going forward. About the Company Whispering Heights Real Estate Private Limited (WHREPL) was incorporated in October 2016 to undertake a commercial real estate project in Worli for leasing out corporates. The total cost of the project including the plot is around Rs Cr. More than half of the cost has been incurred till August 18, which has been funded by Rs Cr of Compulsory Convertible Debentures (CCDs), Rs Cr of Non-Convertible Debentures (NCDs) and promoters contribution. The proceeds have been utilized to acquire the plot and other related expenses. The company may not issue further NCDs above the amount Rs. 156 Crs. Key Financial Indicators Key Parameters Units Result Type Audited Audited Operating Revenue Cr NA NA EBITDA Cr Nil Nil PAT Cr Tangible Net worth Cr Total Debt/Tangible Net worth Times Rating History for the last three years S.No Instrument /Facility Current Rating (2018) Rating History Type (Long Term/ Short Term) ( Crs) Rating 19th Sep Non-Convertible Debenture Long Term (Stable) [Reaffirmed] (Stable) [Assigned] - - Total ( One Hundred & Fifty Six Crores Only) 3 19 Sep 2018

4 Status of non-cooperation with previous CRA (if applicable)- NA Hyperlink/Reference to applicable Criteria General Criteria Approach to Financial Ratios Analytical Contacts Bal Krishna Piparaiya CGM - Ratings analyst@brickworkratings.com Media media@brickworkratings.com Relationship Contact bd@brickworkratings.com Phone: For print and digital media The Rating Rationale is sent to you for the sole purpose of dissemination through your print, digital or electronic media. While it may be used by you acknowledging credit to BWR, please do not change the wordings in the rationale to avoid conveying a meaning different from what was intended by BWR. BWR alone has the sole right of sharing (both direct and indirect) its rationales for consideration or otherwise through any print or electronic or digital media. Note on complexity levels of the rated instrument: BWR complexity levels are meant for educating investors. The BWR complexity levels are available at Investors queries can be sent to info@brickworkratings.com. About Brickwork Ratings Brickwork Ratings (BWR), a SEBI registered Credit Rating Agency, accredited by RBI and empaneled by NSIC, offers Bank Loan, NCD, Commercial Paper, MSME ratings and grading services. NABARD has empaneled Brickwork for MFI and NGO grading. BWR is accredited by IREDA & the Ministry of New and Renewable Energy (MNRE), Government of India. Brickwork Ratings has Canara Bank, a leading public sector bank, as its promoter and strategic partner. BWR has its corporate office in Bengaluru and a country-wide presence with its offices in Ahmedabad, Chandigarh, Chennai, Hyderabad, Kolkata, Mumbai and New Delhi along with representatives in 150+ locations. BWR has rated debt instruments/bonds/bank loans, securitized paper of over 13,22,500 Cr. In addition, BWR has rated over 7000 MSMEs. Also, Fixed Deposits and Commercial Papers etc. worth over 62,000 Cr have been rated. BWR has rated over 30 PSUs/Public Sector banks, as well as many major private players. BWR has a major presence in ULB rating of nearly 102 cities 4 19 Sep 2018

5 DISCLAIMER Brickwork Ratings (BWR) has assigned the rating based on the information obtained from the issuer and other reliable sources, which are deemed to be accurate. BWR has taken considerable steps to avoid any data distortion; however, it does not examine the precision or completeness of the information obtained. And hence, the information in this report is presented as is without any express or implied warranty of any kind. BWR does not make any representation in respect to the truth or accuracy of any such information. The rating assigned by BWR should be treated as an opinion rather than a recommendation to buy, sell or hold the rated instrument and BWR shall not be liable for any losses incurred by users from any use of this report or its contents. BWR has the right to change, suspend or withdraw the ratings at any time for any reasons Sep 2018