Established sponsor profile
The sponsor for the project is M S Infra engineers Private Limited (MSIL). The company is into EPC business for over four decades. Over the years the company has established its presence in the state of Orissa. The net-worth of the sponsor stood at Rs.131.47 crore as on 31st March 2025 (Prov.). MSIPL holds 99.99 percent shares of JMMRPL and provided technical support and financial support including corporate guarantee to the project. Further, MSIPL has a strong financial flexibility as reflected from its healthy financial risk profile and adequate liquidity profile. Acuite believes that the healthy financial risk profile of the sponsor will support KKKH in completing the project on a timely basis.

­Waterfall mechanism in ESCROW account and DSRA
JMMRPL has escrow mechanism through which cash flows from Authority is routed and used for payment as per the defined payment waterfall. Only surplus cash flow after meeting operating expense, debt servicing obligation, and provision for major maintenance expense, can be utilised as per borrower’s discretion during the concession period. Any mismatch in cash flows arising out of timing difference in receipt of annuity and debt repayment is expected to be met through support from MSIPL. The company is to maintain a debt service reserve account (DSRA) equivalent to six months interest and one principal repayment of ~ Rs.4.90 crore.

Low counter party risk 
The Project is issued and awarded by National Highway Logistics Management Limited (NHLML), 100 per cent subsidiary of National Highways Authority of India. The project is being developed under an annuity-based revenue model where JMMRPL bears no Passenger Flow Risk and recovers the entire capital cost through biannual annuity payments. JMMRPL received ~55 per cent of the project cost as construction grants, and the remaining will be paid in 30 semi-annual annuity instalments starting likely from April 2027, adjusted for the Price Index Multiple. JMMRPL will undertake operations and maintenance during the concession phase, with support from NHLML. JMMRPL has scheduled to receive its first milestone payments, in August 2025. The annuity model includes price index adjustments to mitigate inflation-related risks price fluctuation risk to a certain extent.

High Project Execution Risk
The appointment date of the project is 14^th February 2025. The project is at very nascent stage of construction, where construction started from April 2025 with ~ 5 per cent of physical completion is achieved. The first milestone payment is expected by August/September 2025 at 6 per cent physical progress. Any delays in timely achievement of milestone may result into cost or time overrun. The total project cost is Rs.220.82 Cr, to be funded through Rs.28.64 Cr. from promoter’s fund, Rs.119.40 Cr in the form of grants against milestones and term loan of Rs.72.78 Cr. which has been sanctioned. As of June 2025, the project cost incurred is Rs.22 Cr. which has been entirely contributed from the promoter’s fund and rest is expected with milestone achievements. Thus, company is exposed to high project execution risk and moderate funding risk.

Exposed to risks such as delay in receiving annuity payments and any changes in operational cost & interest rate.
As per the concession agreement, the company is expected to receive a semi-annual annuity. Any delay in timely receipt of the annuity could adversely impact debt-servicing ability. Along with fixed annuities, the project will receive interest payments on the balance annuities at a rate equivalent of prevailing bank rate plus spread. Further, the company is exposed to risks related to maintenance of the project. If the prescribed standards and timely maintenances of the project are not performed, it will significantly affect the annuity payments. And with any significant delay or deduction in annuities could impact the debt servicing ability of the company. Acuite believes that any delay or deduction in annuities will affect the debt servicing capabilities of the JMMRPL.