| Established track record of sponsor
The project is sponsored by AIIPL who has an extensive experience of more than four decades in the engineering, procurement & construction business and an established presence in the state of Gujarat, Maharashtra and Madhya Pradesh. The net-worth of the sponsor stood at Rs. 151.58 Cr. as on March 31, 2025. The total cost of project was Rs. 139.22 Cr, of which Rs. 71.22 Cr. was self-funded by the sponsor entity and balance Rs. 68.00 Cr. was received from PWD Maharashtra in the form of capital grants. Post completion of the project in March 2021, the company availed bank borrowing of Rs. 57.30 Cr. in FY23 by way of discounting of future annuities. This debt is supported by corporate guarantee extended from the sponsors, AIIPL and Milan Road Buildtech LLP till the tenure of the loan.
Track record of annuity payments
AMFPPL had completed the construction and achieved final COD in March 2021. The project has been developed under annuity-based revenue model wherein PWD Maharashtra makes bi-annual payment over the concession period (of 10 years) to the concessionaire. Further, the company has received 9 bi-annual annuities amounting total of Rs. 65.90 Cr. till December 2025 from PWD. However, there has been delay of ~3-4 months in receipt of 9th annuity (due in August 2025), on account of reallocation of resources in FY25 by the respective authority leading to fund shortage, however, the debt servicing was timely managed through the support received from the sponsor. Going ahead, Acuité believes that the timely receipt of annuity payment shall continue to remain a key rating sensitivity.
Comfortable financial profile supported by presence of waterfall mechanism in escrow account and maintenance of DSRA
AMFPPL 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. The average debt service coverage ratio (DSCR) is expected to remain at ~1.31 times during the loan tenor. Further, the company maintains a DSRA (amounting to Rs. 5.06 Cr. as on Dec 31, 2025) equivalent to one half yearly instalment of principal plus six months of interest for debt servicing in order to mitigate any unforeseen risk related to delay in annuity receipt along with MMRA reserve (amounting to Rs. 10.96 Cr. as on Dec 31, 2025) towards the major maintenance expenses in the upcoming years.
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| Exposed to risks of delay in annuity receipts and any changes in operational cost & interest rate
While historically the delays in some annuities were managed through support from the sponsor and group companies, the company remains exposed to such delays in receipt of the annuity which could adversely impact debt-servicing ability. Along with fixed annuities, the company also receives interest payments on the balance annuities at a rate equivalent of prevailing bank rate plus spread which exposes it to volatility in the interest rates. 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. Acuité believes that any delay or deduction in annuities will affect the debt servicing capabilities of the AMFPPL.
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