Press Release July 23, 2026 KKK HIGHWAY LLP Rating Reaffirmed

Product	Quantum (Rs. Cr) (SEBI)	Quantum (Rs. Cr) (Other FSR)	Long Term Rating	Short Term Rating	Regulated By
Bank Loan Ratings	0.00	65.00	ACUITE BBB | Stable | Reaffirmed	-	RBI
Total Outstanding	0.00	65.00	-	-	-
Total Withdrawn	0.00	0.00	-	-	-

Note:- For activities or ratings of instruments falling under the purview of Financial Sector Regulators other than SEBI, the grievance / dispute redressal mechanisms and investor protection mechanisms provided by SEBI shall not be available.

Rating Rationale

A­cuité has reaffirmed the long-term rating of ‘ACUITE BBB’ (read as ACUITE triple B) on the Rs.65.00 crore bank facilities of KKK Highway LLP (KKKH). The outlook is ‘Stable’. Rationale for rating The rating factors low revenue risk profile considering annuity nature of project with receipt of eight annuity payments from the authority up to July 10, 2026. However, Acuité notes that there have been sustained delays in receipts of annuity from the authority vis-à-vis the scheduled due dates on account of procedural and administrative issues at the authority's end. While sustained delays remain a key monitorable, the company has continued to service its debt obligations in a timely manner, supported by financial assistance from the sponsor and other partnership firms associated with the LLP's partners. The rating further draws comfort from the sponsor profile and its extensive experience in the infrastructure sector. Further, the company's liquidity position remains adequate, supported by the maintenance of a debt service reserve account (DSRA) & Interest Service Reserve Account (ISRA) equivalent one principal instalment and six months’ interest obligations, along with presence of an escrow mechanism for cash flow management. However, the rating remains constrained by the moderate counterparty-linked revenue profile, as reflected in the recurring delays in annuity receipts from the authority. Further, the rating factors in the exposure to liquidity risks arising from delays in annuity payments as well as variations in operating and interest costs, which could adversely impact the debt-servicing ability of KKKH.

About the Company

KKK Highway LLP (KKKH), is a SPV promoted by DHD Infracon Private Limited. The company entered into concession agreement (CA) on August 2018 with the Public Works Department (PWD) of Government of Maharashtra. Under the CA, it engaged in improvement of Karad Malkapur Nandalpur Pachwad Phata Yenpe Korud Road, SH-144, km 0/000 to 39/400, Tal-Karad and Shirala, District Satara (Km 5/950 to Km 41/010) and improvement of roads connecting the tourist destination in Satara District (Kas Plateau) (Km 0/000 to Km 20/000) Dist.Satara, in the state of Maharashtra on Hybrid Annuity Model. The company is currently managed by Mr. Dattatraya Desai ,Mr. Yatin Sawant and Mr Arun Desai. The total cost of project was Rs. 208.72 Cr, of which Rs 85.09 Cr. was self-funded by the sponsor entity and balance Rs.123.63 Cr. was received from Maharashtra PWD in the form of capital grants. Post completion of the project in March, 2022; the company availed bank borrowing of Rs.62.70 Cr. in FY23 (Outstanding of Rs 45.42 Cr as on June 30,2026) by way of discounting of future annuities.

Unsupported Rating

­Not applicable

Analytical Approach

­Acuité has considered the standalone business and financial risk profiles of KKK Highway LLP to arrive at the rating.

Key Rating Drivers

Strengths

­Established track record of sponsor The project is sponsored by DHD Infracon Private Limited (DHDIPL – Acuite BBB/Stable) which is an EPC (Engineering, Procurement, and Construction) contractor engaged in the business of civil construction for more than 20 years and primarily undertakes road construction works and other allied infrastructure activities in the state of Maharashtra. DHDIPL undertakes infrastructure projects for public works department and various municipal corporations. The current outstanding order book stands at ~Rs.650.00 Cr as on July 14, 2026. Also, DHDIPL has provided corporate guarantee for the term loan availed by KKK Highway LLP. Low revenue risk on account of annuity nature of project The project achieved its commercial operations date (COD) in March 2022, following the grant of an extension by the authority. As per the concession agreement, during the 10-years concession period, the company is eligible to receive semi-annual annuity payments aggregating to Rs. 85.09 Cr from PWD Maharashtra. Under the project structure, 40% of the project cost was received as construction grant, while the balance 60% is payable through 10 semi-annual annuity instalments, with the first annuity having commenced in September 2022. In addition to the annuity payments, PWD Maharashtra is required to reimburse interest on the reducing balance of the completion cost (net of grants) at a rate equivalent to the Bank Rate plus a spread of 3.00%. Further, the authority also reimburses the operation & maintenance (O&M) bid quote, adjusted for the applicable Price Index Multiple (PIM), along with the annuity payments. Comfortable financial profile supported by presence of waterfall mechanism in escrow account and maintenance of DSRA As per the sanction terms, the company is required to create and maintain an ISRA and a DSRA equivalent to one principal instalment and six months’ interest obligations. Additionally, the company maintains a major maintenance reserve (MMR) account to meet major maintenance expenses during the concession period. As on March 31, 2026(Prov.), fixed deposits aggregating to Rs. 11.51 Cr were maintained towards the ISRA, DSRA, and MMR. These fixed deposits are lien-marked in favour of the lending bank. Further KKKH has an 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. Acuité believes that presence of such well-defined waterfall mechanism through escrow to ensure prioritizing of withdrawals and prompt debt repayments.

Weaknesses

­Susceptibility to delays in annuity receipts The company remains exposed to counterparty-linked payment risks, as annuity receipts from the authority have historically been delayed vis-à-vis the scheduled due dates due to procedural and administrative issues. While the project has received all construction milestone payments and eight annuity instalments till July 10, 2026, however, delays have been reported wherein the 7th and 8th annuities were received with delays of 77 days and 105 days, respectively. During the interim period, debt servicing obligations were supported through temporary funding from the sponsor and partnership firms associated with the LLP's partners, enabling timely repayment of debt obligations. Going forward, any prolonged delay in annuity receipts impacting the company's liquidity and debt servicing ability remains a monitorable. Further, the company remains exposed to maintenance-related risks, as failure to maintain the project as per prescribed standards may result in deductions from annuity payments, thereby affecting cash flows. Exposed to interest rate risks The project’s cash flows and returns are exposed to the interest rate risk and are dependent on the spread between the RBI’s bank rate and the interest rate charged by lenders. However, the risk is mitigated to a major extent by the comfortable DSCR, which is expected to withstand adverse movements, if any, in the spread. 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.

Assessment of Adequacy of Credit Enhancement under various scenarios including stress scenarios (applicable for ratings factoring specified support considerations with or without the “CE” suffix)

­KKKH maintains a DSRA equivalent to one principal instalment and six months’ interest obligations. along with escrow mechanism. Stress case Scenario Acuité believes that, given the presence of six-months DSRA and waterfall payment in escrow mechanism, KKKH will be able to service its debt on time, even in a stress scenario.

Rating Sensitivities

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

­ Timely receipt of annuities Improvement in financial risk profile thereby improving its coverage indicators leading to average DSCR above 1.50 times.

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

­ Susceptibility to risk related to or any additional debt availed by the company thereby impacting its coverage indicators leading to average DSCR falling below 1.10 times. Significant delays in annuity receipts or change in support stance of sponsor impacting the liquidity

Liquidity Position

Adequate

­KKKH’s liquidity position is adequate, supported by receipt of milestone payments from PWD Maharashtra (PWDM) during the project execution phase and commencement of annuities inflow from September 2022 onwards with receipt of eight annuities, interest and other payment amounting to ~Rs 72.00 Cr till July 10,2026. Acuité expects that the liquidity of KKKH is likely to remain adequate backed by consistent support from PWDM in terms of annuity payments and the maintenance of a DSRA equivalent to one principal instalment and six months’ interest obligations. The project is expected to generate adequate cash flows to meet its debt servicing obligations of ~ Rs. 10.00 Cr during FY2026–FY2027, supported by anticipated receipts from PWDM of ~ Rs. 19.37 Cr (net of taxes) over the same period. The debt protection metrics are expected to remain adequate, with an average DSCR of ~ 1.37 times over the residual debt tenure. The company had a cash and bank balance of Rs 0.28 Cr as on March 31, 2026 (Prov.)

Outlook-Stable

­

Other Factors affecting Rating

­None

Key Financials

Particulars	Unit	FY 26 (Provisional)	FY 25 (Actual)
Operating Income	Rs. Cr.	10.65	4.79
PAT	Rs. Cr.	0.72	(2.09)
PAT Margin	(%)	6.77	(43.61)
Total Debt/Tangible Net Worth	Times	5.60	4.04
PBDIT/Interest	Times	1.15	0.61

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

­Not applicable

Any other information

­None

Applicable Criteria

• Default Recognition :- https://www.acuite.in/view-rating-criteria-52.htm • Infrastructure Sector: https://www.acuite.in/view-rating-criteria-51.htm • Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.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 24 Apr 2025 Proposed Term Loan Long Term 11.66 ACUITE BBB | Stable (Reaffirmed) Term Loan Long Term 53.34 ACUITE BBB | Stable (Reaffirmed) 31 Jan 2024 Term Loan Long Term 58.55 ACUITE BBB | Stable (Assigned) Proposed Term Loan Long Term 6.45 ACUITE BBB | Stable (Assigned)

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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

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