Press Release

Press Release

March 31, 2026

VASAVI AVENUES LLP
Rating Upgraded

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	650.00	ACUITE BBB- \| Stable \| Upgraded	-
Total Outstanding	650.00	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

Acuité has upgraded the long-term rating to 'ACUITE BBB-' (read as ACUITE triple B minus) from 'ACUITE BB+' (read as ACUITE double B plus) on the Rs 650.00 Cr. bank facilities of Vasavi Avenues LLP (VAL). The outlook is ‘Stable’.

Rationale for rating upgrade
The rating upgradation considers the migration of VAL from 'Issuer Not Co-operative (INC)' status. The rating considers the long-standing experience of the Vasavi group in real estate market and healthy track record of execution and collection of residential and commercial projects. Further, it factors the low execution risk of the ongoing project at Vasavi Avenues LLP – Ananda Nilayam, with nearly 72.11% of execution completion as on January 2026. The rating also draws support from adequate cash flow position with above unity project DSCR. However, rating is constrained by low sales velocity with only 42.14% of units being sold till January 2026 (of which 74.82% advances collected). Therefore, offtake risk and susceptibility of cyclicality inherent to real estate industry and capital withdrawal risk continue to remain key rating challenges.

About the Company

Vasavi Avenues LLP, a Hyderabad, Telangana based firm was established in the year 2023 as a Special Purpose Vehicle (SPV) by Vasavi group for the Project ‘Ananda Nilayam’. The project spans 29.6 acres, of which 26.3 acres have been purchased outright, while the balance 3.3 acres is under a Joint Development Agreement. The development comprises 11 residential towers, 2 clubhouses, and multiple amenities, located in a well-developed micro-market with robust residential and commercial infrastructure such as educational institutions, supermarkets, hospitals, and retail establishments. The firm is currently managed by Mrs. Vanitha Yerram and Mr. Vijay Kumar Yerram.

Unsupported Rating

Not applicable

Analytical Approach

Acuite has considered the standalone business and financial risk profile of Vasavi Avenues LLP(VAL) to arrive at this rating.

Key Rating Drivers

Strengths

Experienced promotor group coupled with favourable ongoing project location
Vasavi Group, promoted by Mr. Vijay Kumar Yerram, is a well-established Hyderabad-based real estate developer with over three decades of execution experience. The group enjoys strong brand recognition in Hyderabad and Telangana, supported by a track record of delivering quality residential and commercial projects and has completed more than 1.41 Cr Sq.fts of residential and commercial projects as on date.
Vasavi Avenues LLP (VAL), an SPV of the group, is developing the residential project “Ananda Nilayam” at LB Nagar, Hyderabad. The project is located at LB Nagar, a densely populated residential area in eastern Hyderabad and adjacent to Vasavi L.B. Nagar Metro Station.Acuité believes the promoters’ established execution capability, financial strength, and sector experience provide significant comfort towards the successful completion of the ongoing project.

Moderate funding risk and adequate cash flow visibility
The Ananda Nilayam project has a total saleable area of 82.24 lakh sq. ft., of which VAL’s share is 79.49 lakh sq. ft. The total project cost of Rs 2,655.96 Cr. is funded through promoter contribution of Rs 400 Cr, a sanctioned bank loan of Rs 650 Cr, and the balance through customer advances. Funding risk is low as the entire debt requirement has been tied up and Rs 451.48 Cr. has been disbursed as of January 2026. Further cash flows are expected to remain adequate, with an average projected DSCR of 2.12 times, staying above unity throughout the project tenure.

Low project execution risk
The project commenced construction in December 2022 and was launched in January 2023, with targeted completion by December 2028. Execution risk is low as the project remains in the mid-stage of development, with 72.11% of the total cost incurred as of January 2026. Further, the risk is partly mitigated by the Vasavi Group’s strong execution track record and history of timely delivery across earlier projects. However, any significant delays in construction progress could result in cost overruns and timeline extensions, which will remain key rating sensitivities.

Weaknesses

Modest growth in sales momentum
As of January 2026, the project has achieved 37.89 percent booking from 31.58 percent as of December 2024, reflecting a modest growth of 6.30 percent mainly due to largely due to political and geographical developments in Telangana. Further, of the units sold 42.14% of customer advances has been realised. Moreover, majority of the project cost is to be funded through customer advances, hence, increase in sales velocity and property rates remains a key rating monitorable. However, while sales momentum was low, the project progress is healthy with funding being met through increased promoter contributions (Rs 498.42 Cr. infused January 2026).

Susceptibility to real estate cyclicality and regulatory risks
The real estate industry in India is highly fragmented with most of the real estate developers, having a city specific or region-specific presence which increases the geographical concentration risk. Likewise, Vasavi group is also concentrated in the Hyderabad market. Further, the risks associated with real estate industry are cyclical in nature and directly linked to drop in property prices and interest rate risks, which could affect the operations. Given the high level of financial leverage, the high cost of borrowing prevents the real estate's developers' from significantly reducing prices to boost sales growth. Moreover, the industry is also exposed to competition risks, certain regulatory risks linked to stamp duty and registration tax directly impacting the demand and thus the operating growth of real estate players.

Capital withdrawal risk
Being an LLP, firm is exposed to the capital withdrawal risk. Any significant withdrawal from the partner’s capital will have a negative bearing on the financial risk profile of the firm.

Rating Sensitivities

Potential triggers (individual or collective) for an upward rating action:

Timely completion of the ongoing project upto March-28 without any cost or time overrun
Timely sale of unsold inventory and realisation of its customer advances from bookings leading to improvement in DSCR above 3.00 x

Potential triggers (individual or collective) for a downward rating action:

Any sharp decline in cash flow due to slower customer advances or delays in project execution leading to fall in DSCR below 1.50 x

Liquidity Position

Adequate

The firm is in advance stage of construction, liquidity is aided by infusion from promotors, disbursement of bank loan and collection from customers. The firm is expected to have adequate liquidity over the medium term with an expected DSCR of 2.12 times over the tenure of the project.

Outlook-Stable

Other Factors affecting Rating

None

Key Financials

Particulars	Unit	FY 25 (Actual)	FY 24 (Actual)
Operating Income	Rs. Cr.	0.06	193.28
PAT	Rs. Cr.	0.23	13.90
PAT Margin	(%)	385.63	7.19
Total Debt/Tangible Net Worth	Times	2.94	7.87
PBDIT/Interest	Times	1.09	2.59

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

Not applicable

Any other information

1.Search & seizure operations u/s 132 of the income tax was conducted at the premises of Vasavi group and entities of group on August 17, 2022. VAL was also covered under the search proceedings. Consequent to search and seizure operations, proceedings u/s 148 of the income tax act were initiated against the LLP. LLP has paid off the liability in the income tax returns of the assessment year 2024-25( FY 2023-24). Apart from these no material liability is due for the LLP as on date.
2.The firm did not cross tthreshold limits in FY 2024–25 for conducting a statutory audit .Acuite has considered management certified financials for FY 2024-25.

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
• Real Estate Entities: https://www.acuite.in/view-rating-criteria-63.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

Date	Name of Instruments/Facilities	Term	Amount (Rs. Cr)	Rating/Outlook
08 Jan 2026	Term Loan	Long Term	650.00	ACUITE BB+ (Downgraded & Issuer not co-operating* from ACUITE BBB- \| Stable)
25 Mar 2025	Term Loan	Long Term	650.00	ACUITE BBB- \| Stable (Reaffirmed)
26 Dec 2023	Term Loan	Long Term	650.00	ACUITE BBB- \| Stable (Assigned)

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	31 Aug 2023	Not avl. / Not appl.	01 Dec 2028	650.00	Simple	ACUITE BBB- \| Stable \| Upgraded ( from ACUITE BB+ )

Contacts

Mohit Jain
Chief Analytical Officer - Rating Operations

Divya Bagmar
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.

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