Press Release

Press Release

February 24, 2025

ACHOLE DEVELOPERS PRIVATE LIMITED
Rating Assigned

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	195.10	ACUITE A- \| Stable \| Assigned	-
Bank Loan Ratings	0.90	-	ACUITE A2+ \| Assigned
Total Outstanding	196.00	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

Acuité has assigned its long-term rating of ‘ACUITE A-’ (read as ACUITE A Minus) on bank facilities Rs. 195.10 Cr. and short term rating of 'ACUITE A2+' (read as ACUITE A two plus) on bank facilities of Rs 0.90 Cr. of Achole Developers Private Limited (ADPL). The outlook is 'Stable'.

Rationale for the Rating Assigned
The rating assigned reflects the strong promoter strength of the company. The rating factors in the prime location of Capital mall in Nalasopara, Maharashtra, coupled with its reputed lessee profile consisting of high-end retail brands and healthy occupancy levels with medium to long-term lease agreements with them. Additionally, the rating takes into account the low refinancing risk due to the recent refinancing of its LRD loans, which now have a 15-year tenure. Furthermore, the average DSCR is estimated to remain over well over 1x till FY2029. However, these strengths are partially offset by susceptibility of the revenues to the tenant’s performance along with occupancy and renewal risk and exposure to adverse macroeconomic and external conditions, which could impact the tenant’s business profile.

About the Company

Incorporated in 2018, Achole Developers Private Limited (ADPL) is based in Mumbai. The Company is engaged in the business of owning and operating the Capital Mall located in Nalasopara, Maharashtra. The company is owned by Lake Shore India Retail Venture Fund (‘Lake Shore’) and Mr. Darpan Shah in 70:30 ratio. Abu Dhabi Investment Authority (ADIA) is the primary investor in LSIRVF. The directors of the company include Mr. Ashwin Puri, Mr. Karim Kasimali Merchant & Mr. Rajamani Koshtishwaran Iyer.

Unsupported Rating

Not Applicable

Analytical Approach

Acuité has considered the standalone business and financial risk profiles of the ADPL to arrive at this rating.

Key Rating Drivers

Strengths

Strong Promoter Strength
Achole Developers Private Limited is owned by Lake Shore India Retail Venture Fund (LSIRVF) having 70% shareholding and the rest 30% is owned by Mr. Darpan Shah. The primary investor in LSIRVF is the Abu Dhabi Investment Authority (ADIA), one of the world’s largest sovereign wealth funds. ADIA has significantly contributed to Lake Shore’s capacity to undertake large-scale projects. The group has developed various malls in the Mumbai Metropolitan Region (MMR), Pune, Gurugram, and Ghaziabad. It currently operates five malls with a total leasable area of approximately 2.5 million sq. ft. Acuite believes the company will continue to benefit from its established presence and strong promoter strength in the industry.

Steady revenue stream supported by medium to long-term lease agreements and reputed lessee profile
Capital Mall is leased to various tenants across multiple sectors having medium to long-term lease agreements. The current monthly lease rental generated by the mall is approximately Rs. 2.5-2.75 Cr. The lessee profile includes prominent brands across segments such as Peter England, Jockey, Arrow, Louis Phillipe, Allen Solly, Barista, KFC Pantaloons, Reliance trends, Nykaa amongst others. The lease rental agreements have tenures ranging from 2 to 18 years, with a price escalation clause of 15 percent every 3 years. The mall also maintains lock-in contracts with these lessees, with terms varying from 6 to 36 months. Acuité believes that ADPL’s revenue will continue to be supported by medium to long-term lease agreements and reputed lessee profile.

Locational Advantage along with healthy occupancy levels coupled with low refinancing risk
Capital mall is strategically located on the new link road, Near Nalasopara Railway Station East, Nalasopara East, Village Achole. The property is centrally located from all the major residential hubs in Vasai – Virar Stretch. The mall attracts footfall from catchment areas as well as surrounding areas. The company has a leasable area 3,25,000 sq. ft with carpet area of approx. 2,25,000 sq. ft, the total leasable area includes 101 stores and around 35 kiosks. Out of the total stores, 88 are currently leased to a variety of brands spanning several sectors. The mall has a healthy occupancy level of around 95% over a period of 21 months ended September’24 reflecting healthy vacancy management. Further, ADPL has refinanced its existing loans with a longer tenure of 15 years, thereby mitigating the refinancing risk.

Weaknesses

Susceptibility to tenant’s performance along with occupancy and renewal risk
ADPL primarily generates cash flows from lease rentals. The company's ability to meet its repayment obligations will be dependent on the continued and timely flow of rentals as per the agreed terms under arrangement. The occurrence of events such as delays in receipt of rentals, or early exits/renegotiation by tenants due to the latter's lower than expected business performance may result in disruption of cash flow streams, thereby affecting ADPL's debt servicing ability.

Vulnerability to external factors
ADPL’s revenues are exposed to adverse macroeconomic and external conditions, which could impact the tenant’s business risk profiles. The rating also notes the vulnerability of its debt coverage metrics to factors such as changes in interest rates or material reduction in occupancy levels.

Rating Sensitivities

High debt-funded capital expenditure in the near to medium term.
Timely renewal of agreement at similar or better terms than the existing agreements.

Liquidity Position

Adequate

The liquidity position of the company is adequate marked by generation of sufficient cash flows to service its debt obligations. Further it is supported by maintenance of DSRA, equivalent to three months of repayment obligation which stood at Rs. 4.79 Cr. as of January 10, 2025. In addition, as per the terms of sanction, it stipulates an escrow mechanism through which rent receipts are routed and used for payment as per the defined payment waterfall.

Outlook: Stable

Other Factors affecting Rating

None.

Key Financials

Particulars	Unit	FY 24 (Actual)	FY 23 (Actual)
Operating Income	Rs. Cr.	46.69	33.02
PAT	Rs. Cr.	(17.30)	(27.61)
PAT Margin	(%)	(37.06)	(83.62)
Total Debt/Tangible Net Worth	Times	2.50	1.98
PBDIT/Interest	Times	0.69	0.30

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

None

Any other information

None

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 :

Not Applicable

Annexure - Details of instruments rated

Lender’s Name	ISIN	Facilities	Date Of Issuance	Coupon Rate	Maturity Date	Quantum (Rs. Cr.)	Complexity Level	Rating
Union Bank of India	Not avl. / Not appl.	Bank Guarantee (BLR)	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	0.90	Simple	ACUITE A2+ \| Assigned
Not Applicable	Not avl. / Not appl.	Proposed Long Term Bank Facility	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	0.10	Simple	ACUITE A- \| Stable \| Assigned
Union Bank of India	Not avl. / Not appl.	Term Loan	Not avl. / Not appl.	Not avl. / Not appl.	31 Mar 2039	120.00	Simple	ACUITE A- \| Stable \| Assigned
Union Bank of India	Not avl. / Not appl.	Term Loan	Not avl. / Not appl.	Not avl. / Not appl.	31 Mar 2039	75.00	Simple	ACUITE A- \| Stable \| Assigned

Sublimits: Union Bank of India: Overdraft - Rs. 19.50 Cr (Sublimit of total term loan of Rs. 195 Cr.)

Contacts

Mohit Jain
Senior Vice President - Rating Operations

Sayali Parab
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.

Disclaimer: An Acuité rating does not constitute an audit of the rated entity and should not be treated as a recommendation or opinion that is intended to substitute for a financial adviser's or investor's independent assessment of whether to buy, sell or hold any security. Ratings assigned by Acuité are based on the data and information provided by the issuer and obtained from other reliable sources. Although reasonable care has been taken to ensure that the data and information is true, Acuité, in particular, makes no representation or warranty, expressed or implied with respect to the adequacy, accuracy or completeness of the information relied upon. Acuité is not responsible for any errors or omissions and especially states that it has no financial liability whatsoever for any direct, indirect or consequential loss of any kind, arising from the use of its ratings. Ratings assigned by Acuité are subject to a process of surveillance which may lead to a revision in ratings as and when the circumstances so warrant. Please visit our website (www.acuite.in) for the latest information on any instrument rated by Acuité. Please visit https://www.acuite.in/faqs.htm to refer FAQs on Credit Rating.

Note: None of the Directors on the Board of Acuité Ratings & Research Limited are members of any rating committee and therefore do not participate in discussions regarding the rating of any entity.