Press Release January 06, 2025 BAMA HIGHWAYS PRIVATE LIMITED Rating Assigned

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	578.00	ACUITE BBB+ | Stable | Assigned	-
Total Outstanding	578.00	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

­­­Acuite has assigned long term rating of 'ACUITE BBB+' (read as ACUITE triple B plus) on Rs. 578 Cr. bank facilities of Bama Highways Private Limited. The outlook is 'Stable'. Rationale for Rating The rating derives comfort from the financial and operational support from R K D Constructions Private Limited(rated at Acuité A /Stable/A1).The rating factors that the project is being developed on a hybrid annuity model (HAM) where revenue risk is low post-commencement of project execution. Moreover, the company has achieved financial closure to fund its project and also received its appointment date i.e 8th October, 2024.

About the Company

­­­­Orissa based, BAMA Highways Private Limited (BHPL) was incorporated in the year 2023. It is a special purpose vehicle company promoted by RKD Construction Private Limited (the Project Sponsor) to undertake “Construction of four laning of Bakarpur-Manikpur road section starting from village Chitarsenpur and terminating at SH-74 near Manikpur (38+814) at NH-139W under Bharatmala Pariyojna on HAM mode in the state of Bihar.” The operations are managed by Mr Swayam Prakash Das and Mr Rohan Das.

Unsupported Rating

­ACUITE BB/Stable

Analytical Approach

­­­­Acuite has considered the standalone business and financial risk profile Bama Highways Private Limited (BHPL) and notched up the standalone rating by factoring in the financial and operational linkages with R K D Constructions Private Limited.

Key Rating Drivers

Strengths

­­Strong Parentage R K D Constructions Private Limited is the EPC Contractor and sponsor for BHPL. RKDCPL is a reputed EPC player in Odisha and has experience in construction of roads and highways. The group has executed similar kinds of road projects in EPC mode which leads to reduction of  implementation risk. Moreover, the group has strong financial flexibility as reflected from its healthy financial risk profile and adequate liquidity profile. Total project cost is around Rs 1212.84 Cr. which is funded through Rs 72.25 Cr. of equity contribution, Rs. 72.25 Cr. of subordinated unsecured loans, Rs 490.34 Cr. of construction support from National Highways Authority of India (NHAI) and remaining Rs 578.00 Cr. as term loan from State Bank of India.  ­­Low Revenue Risk BHPL has signed an agreement with NHAI for contractual payment in the form of grants and annuities. The project cost is Rs. 1121.65 Cr. (excluding GST) BHPL will receive 40 percent of project cost in form of grants during the construction period. The remaining 60% of project cost shall be payable in the form of 30 semi-annuities spread over a period of 15 years post achievement of commercial operation date (COD). The project has an escalation clause which helps the company to mitigate the material fluctuation risk. The annuities will also include interest on remaining completion cost. The interest will be calculated on average MCLR rate plus 1.20 percent.

Weaknesses

­­­­­Susceptibility to risks related to the tender-based nature of operations and competition SPV remains exposed to inherent cyclicality in the construction industry and volatility in profits . Though industry prospects seem healthy over the medium term with increased central government focus on the infrastructure sector (especially roads and highways), most of the projects are tender-based and players face intense competition and bid aggressively for contracts.

Rating Sensitivities

­Achievement of milestones as per schedule Timely infusion of funds by promoters in the form of equity and unsecured loans

Liquidity Position

Adequate

­­­­The company has adequate liquidity profile marked by strong resource mobilization from its parent entity.

Outlook: Stable

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Other Factors affecting Rating

­None

Key Financials

Particulars	Unit	FY 24 (Actual)	FY 23 (Actual)
Operating Income	Rs. Cr.	0.00	0.00
PAT	Rs. Cr.	(0.03)	0.00
PAT Margin	(%)	0.00	0.00
Total Debt/Tangible Net Worth	Times	(0.57)	0.00
PBDIT/Interest	Times	(0.38)	0.00

Status of non-cooperation with previous CRA (if applicable)

­None

Any other information

­None

Applicable Criteria

• Default Recognition :- https://www.acuite.in/view-rating-criteria-52.htm • Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm • Group And Parent Support: https://www.acuite.in/view-rating-criteria-47.htm

Note on complexity levels of the rated instrument

­In order to inform the investors about complexity of instruments, Acuité has categorized such instruments in three levels: Simple, Complex and Highly Complex. Acuite’s categorisation of the instruments across the three categories is based on factors like variability of the returns to the investors, uncertainty in cash flow patterns, number of counterparties and general understanding of the instrument by the market. It has to be understood that complexity is different from credit risk and even an instrument categorized as 'Simple' can carry high levels of risk. For more details, please refer Rating Criteria “Complexity Level Of Financial Instruments” on www.acuite.in.

Rating History:Not Applicable

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Annexure - Details of instruments rated

Lender’s Name ISIN Facilities Date Of Issuance Coupon Rate Maturity Date Quantum (Rs. Cr.) Complexity Level Rating State Bank of India Not avl. / Not appl. Term Loan 12 Feb 2024 Not avl. / Not appl. 12 May 2040 578.00 Simple ACUITE BBB+ | Stable | Assigned

*Annexure 2 - List of Entities (applicable for Consolidation or Parent / Group / Govt. Support)

­ Sr. No.  Company name 1 Bama Highways Private Limited 2 R K D Constructions Private Limited

Contacts

Mohit Jain Senior Vice President - Rating Operations Vedika Lahoti Associate Analyst - Rating Operations	Contact details exclusively for investors and lenders Mob: +91 8591310146 Email ID: analyticalsupport@acuite.in

About Acuité Ratings & Research

Acuité is a full-service Credit Rating Agency registered with the Securities & Exchange Board of India (SEBI). The company received RBI Accreditation as an External Credit Assessment Institution (ECAI) for Bank Loan Ratings under BASEL-II norms in the year 2012. Acuité has assigned ratings to various securities, debt instruments and bank facilities of entities spread across the country and across a wide cross section of industries. It has its Registered and Head Office in Kanjurmarg, Mumbai. Disclaimer: An Acuité rating does not constitute an audit of the rated entity and should not be treated as a recommendation or opinion that is intended to substitute for a financial adviser's or investor's independent assessment of whether to buy, sell or hold any security. Ratings assigned by Acuité are based on the data and information provided by the issuer and obtained from other reliable sources. Although reasonable care has been taken to ensure that the data and information is true, Acuité, in particular, makes no representation or warranty, expressed or implied with respect to the adequacy, accuracy or completeness of the information relied upon. Acuité is not responsible for any errors or omissions and especially states that it has no financial liability whatsoever for any direct, indirect or consequential loss of any kind, arising from the use of its ratings. Ratings assigned by Acuité are subject to a process of surveillance which may lead to a revision in ratings as and when the circumstances so warrant. Please visit our website (www.acuite.in) for the latest information on any instrument rated by Acuité. Please visit https://www.acuite.in/faqs.htm to refer FAQs on Credit Rating. Note: None of the Directors on the Board of Acuité Ratings & Research Limited are members of any rating committee and therefore do not participate in discussions regarding the rating of any entity.