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
Acuite has downgraded its long-term rating to “ACUITE BBB” (read as ACUITE Triple B) from “ACUITE BBB+”(read as ACUITE Triple B plus) and short term rating to "ACUITE A3+” (read as ACUITE A three plus) from "ACUITE A2” (read as ACUITE A two) for the bank loan facilities of Rs. 88.50 Cr. of Colossal Warehouse and Logistics Private Limited (CWLPL). The outlook is “Stable”.
Further, Acuite has withdrawn the long term rating of Rs. 138.00 Cr. and short term rating of Rs. 5.00 Cr. for the bank loan facilities of Colossal Warehouse and Logistics Private Limited (CWLPL) without assigning any rating, as the instrument is fully repaid. The rating has been withdrawn on account of the request received from the issuer along with no dues certificate received from the lender, as per Acuité's policy on withdrawal of ratings as applicable to respective facility / instrument.
Rationale for rating
The rating downgrade reflects the delay in lease tie-ups and rental commencement at the Delhi Project on account of the pending receipt of the Occupancy Certificate (OC) and the temporary pause of construction activities of the remaining two (B01 and B02) out of three blocks under the Rajpura Project owing to the pending execution of proposed LOIs for these two blocks. Acuite notes that the timely lease tie-ups and commencement of rentals under both projects will be key rating sensitivity factors. The rating further remains constrained by the exposure to project execution risk and demand risk. However, the rating continues to derive comfort from the strong and experienced promoter ~ ESR Group, the presence of DSRA, and the escrow mechanism with the lenders.
About the Company
Incorporated in 2019, Colossal Warehouse and Logistics Private Limited is engaged in the business of acquiring land and developing warehouses on those land parcels for the purpose of renting. Presently it is developing two warehouses at Delhi and Punjab. The company has its registered office at New Delhi. The present directors of the company are Mr. Stuart Gibson, Mr. Ishwar Shandilya and Mr. Abhijit Malkani.
Unsupported Rating
Not Applicable
Analytical Approach
Acuite has taken the standalone financial and business risk profile of Colossal Warehouse and Logistics Private Limited to arrive at this rating and notched up the standalone rating by factoring in the strong operational and financial support extended by the ESR Group.
Key Rating Drivers
Strengths
Experienced and Strong Promoter
CWLPL is a special purpose vehicle (SPV), fully owned by ESR Rajpura 1 Pte Ltd. (part of ESR Group), for constructing and managing projects in Delhi and Rajpura. ESR Group is the leading logistics real estate platform focusing on the Asia-Pacific region. It is a comprehensive real estate asset management company that acquires and manages land and buildings, listed REITs, private funds, etc. and develops real estate. ESR entered the Indian market in 2017 with the aim to transform the industrial and logistics space and currently has a presence in 10 cities and around 22 sites across India. Acuite believes that CWLPL will continue to derive benefit from the experience and support extended by its promoters.
Presence of DSRA and Escrow Mechanism
As per the arrangement with lenders, all the cash inflows from lease rentals will be routed directly to the escrow account. In addition, the company is required to maintain a Debt Service Reserve Account (DSRA) equivalent to three months of interest obligations, which provides additional support to its liquidity profile.
Weaknesses
Delay in obtaining occupancy certificate under Delhi Project
The debt structure of the Delhi project has undergone refinancing, wherein the construction term loan has been fully repaid through proceeds raised from the issuance of non-convertible debentures. However, the project faces occupancy and revenue ramp-up risks with lease agreements executed for only 5% of the total leasable area despite the construction being fully completed. Further, commencement of lease rentals has been shifted to January 2027 from the earlier envisaged date of April 2026 due to delays in obtaining the Occupancy Certificate (OC). The delay is mainly attributable to the ongoing formulation and rationalization of warehousing and logistics-related policies by the Delhi Government. Although the company is in discussions with prospective tenants for the balance area, timely receipt of the OC, further lease tie-ups, and commencement of lease rentals remain key monitorable factors.
Exposure to project risk of Rajpura Project
CWLPL remains exposed to project execution risk, with the Rajpura project currently under construction while the Delhi project has been completed. The Rajpura project is expected to be commissioned by March 2027, as per the current SCOD. Construction of two out of the three blocks is presently paused and is expected to resume upon execution of the proposed Letter of Intent (LOI) for Blocks B01 and B02, which is anticipated in the near term. Accordingly, timely signing of the LOI and subsequent resumption of construction activities remain key monitorable factors. The execution risk is partially mitigated by tied-up funding for the entire project cost and the extended financial support from the promoter towards debt servicing in case of funding gaps. Acuite notes that timely project execution will remain a key rating sensitivity in the near to medium term.
Demand Risk
Demand risk persists for the ongoing Rajpura and Delhi projects, given the limited leasing visibility. For the Rajpura Project, the risk is partially mitigated by the leasing of Block B03 out of the total three blocks and the commencement of rentals from October 2025. However, the construction activities for the remaining two blocks (B01 & B02) are presently paused and are expected to resume upon execution of the proposed Letter of Intent (LOI). Moreover, for the Delhi Project, occupancy and rental commencement with clientele remain contingent on timely receipt of occupancy certificate (OC). The company's ability to achieve timely occupancy ramp-up will remain a key monitorable.
Rating Sensitivities
Potential triggers (individual or collective) for an upward rating action:
Timely tie up of LOI’s for both projects.
More than expected overall collection through lease rentals.
Potential triggers (individual or collective) for a downward rating action:
Sharp decline in cash flow by further delay in tie up of LOI’s.
Delays in project execution
Average DSCR of combined project portfolio falls below 1.1 times.
Liquidity Position
Adequate
The liquidity profile of the company is adequate, driven by the fully tied-up funding structure for the under-development Rajpura project and the expected financial support from the promoter, ESR Rajpura 1 Pte. Ltd., towards meeting any potential shortfall in debt servicing obligations. The available cash surplus is expected to be Rs. 2.04 Cr. in FY2027 as against debt repayment obligations of around Rs. 0.50 Cr. in the same period. Further, the combined project portfolio is expected to generate an average DSCR of over 1.40 times during FY2027-FY2031, indicating adequate debt coverage. The company’s cash and cash equivalents are estimated at Rs. 7.18 crore as on 31st March 2026. Going forward, the expected commencement of lease rentals and gradual occupancy ramp-up are expected to provide steady cash inflows and support the company's liquidity profile over the medium term.
Outlook: Stable
Other Factors affecting Rating
None
Particulars
Unit
FY 25 (Actual)
FY 24 (Actual)
Operating Income
Rs. Cr.
0.00
0.00
PAT
Rs. Cr.
(7.38)
(3.77)
PAT Margin
(%)
0.00
0.00
Total Debt/Tangible Net Worth
Times
14.99
12.43
PBDIT/Interest
Times
0.39
0.16
Status of non-cooperation with previous CRA (if applicable)
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.
*Annexure 2 - List of Entities (applicable for Consolidation or Parent / Group / Govt. Support)
Sr. No.
Company Name
1
Colossal Warehouse and Logistics Private Limited
2
ESR Group
Contacts
List of instruments and names of regulators of the instruments
