­Based in Chennai (Tamil Nadu) and incorporated as a private limited company in 2010, Hazel Realty Private Limited (HRPL) is engaged in developing residential units in Chennai, Tamil Nadu. The company was incorporated under the name ‘VGN Pragnya Realty Private Limited’ as a joint venture between VGN Group (well-known name in Chennai Real Estate Industry) and Pragnya Fund (Mauritius Based Private Equity Fund). In 2014, Pragnya Fund purchased the shares of VGN group to the extent of 26 percent of total shares of HRPL leading to Pragnya Group holding 100 percent shares in the HRPL. The company was then renamed to current name of ‘Hazel Realty Private Limited’. The shareholding structure of the company has been changed and currently, Guna Developers Limited and Badrinath Commotrade Private Limited are the ordinary shareholders and Pragnya Fund II is the shareholder in Class A equity shares with 95% voting rights. Further, Guna Developers Limited is a Group company of Pragnya Group. Hence, effectively Pragnya Group has 99.4% economic interest and voting rights in HRPL. Currently HRPL is managed by Mr. Sri Krishna Bhogaraju and Mr. Ch Naveen Sagar. The Company is developing a residential apartment project named as “Hazel” spread across 5.67 acres of land located at Paruthipattu Village, Poonamallee Taluk, Thiruvallur District, Chennai. The residential units’ size ranges from 568 sq. ft to 1647 sq. ft and the project consists of 1-BHK, 2-BHK and 3-BHK apartments. Hazel has a total of 781 units across 4 blocks (6 towers),  each  block  comprising  of  a  basement,  stilt  &  14  floors.  The  project  has  been successfully launched during the year 2012 in a phased manner and 715 units were booked as of September 2022 amounting to 8,19,571 Sq ft out of 9,13,098 Sq Ft. The value of sold units stood at Rs.294.20 Cr with current receivable amounting to Rs.33.23 Cr. The unsold units stood at 66  units amounting to 93,527 sq ft.

­Incorporated in 2003, Pragnya Fund, is a real estate private equity firm focused on developing markets in India and Sri Lanka through its real estate opportunity funds Pragnya Fund I and Pragnya Fund II. The funds are managed by Mr. Subba R Dukkipati and Mr. Gopal Menon. Pragnya raised its first fund, “Pragnya Fund 1” in 2005-06 with investments into 6 projects across India and Sri Lanka. Later, in 2012, Pragnya successfully raised its second fund “Pragnya Fund II” and currently is invested into 5 projects in South India and Sri Lanka. Pragnya raised its third major fund Pragnya South City Opportunity Fund in 2016-17 towards development of township in Chennai, Tamil Nadu. The projects are being developed in joint ventures with reputed local partners, achieving diversification in both products and geographies. Pragnya Group (including all the project specific entities formed) is in the process of completing over 15 million sq. ft. of Residential, Office Space, Showroom/Retail Space, SEZ, Townships, etc.

Acuité has been requesting for data, information and undertakings from the rated entity for conducting surveillance & review of the rating. However, the issuer/borrower failed to submit such information before the due date. Acuité believes that information risk is a critical component in such ratings, and noncooperation by the issuer along with unwillingness to provide information could be a sign of potential deterioration in its overall credit quality. This rating is, therefore, being flagged as “Issuer not-cooperating”, in line with prevailing SEBI regulations and Acuité’s policies. 

­The rating is based on information available from sources other than the issuer/borrower (in the absence of information provided by the issuer/borrower). Acuité endeavoured to gather information about the entity/ industry from the public domain. Therefore, Acuité cautions lenders and investors regarding the use of such information, on which the indicative credit ratingis based.

­"­No information provided by the issuer / available for Acuite to comment upon."

­"No information provided by the issuer / available for Acuite to comment upon."

Not Applicable

Supplementary Disclosures for provisional ratings
­A. Risks associated with the provisional nature of the credit rating
1. Absence of any entity to take appropriate measures to protect the interest of the debenture holders in case of any breach of the trust deed or law.
2. Absence of guaranteed support from the group entity in case of any exigency.
3. Absence of any structured payment mechanism.
4. Absence of secured charge on the collections from the sales of units through the escrow account.
5. In case, there are material changes in the terms of the transaction after the initial assignment of the provisional rating and post the completion of the issuance (corresponding to the part that has been issued), Acuite will withdrawthe existing provisional rating and concurrently, assign afresh final rating in the same press release, basis the revised terms of the transaction.
B. Rating that would have been assigned in absence of the pending steps/ documentation
The rating would be equated to the rating of the entity: ACUITE BB/Stable.
C. Timeline for conversion to Final Rating for a debt instrument proposed to be issued: The provisional rating shall be converted into afinal rating within 90 days from the date of issuance of the proposed debt instrument. Under no circumstance shall the provisional rating continue upon the expiry of 180 days from the date of issuance of the proposed debt instrument.