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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 207.00 | ACUITE A- | Stable | Assigned | - |
| Total Outstanding | 207.00 | - | - |
| Total Withdrawn | 0.00 | - | - |
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Rating Rationale |
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Acuite has assigned its long-term rating of 'ACUITE A-' (read as ACUITE A minus) on Rs.207 Cr. bank loan facilities of Dwellings Star Developers Private Limited (DSDPL). The Outlook is 'Stable'.
Rationale for Rating The rating assigned factors the full occupancy and overall improvement in rental income of its total leasable area with reputed clientele such as Network 18 Media, Bharti Airtel, PWC, Starbucks, among others. The rating provides additional comfort with the presence of DSRA for one quarter of debt obligation, routing of lease rentals through escrow account and utilization of rentals with waterfall mechanism. However, the rating is constrained by renewal risk which is in regard to tenure and lease rentals which will remain a key rating sensitivity factor. |
| About the Company |
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Uttar Pradesh based; Dwellings Star Developers Private Limited is a SPV (Special Purpose Vehicle) incorporated in the year 2016. The Directors of the company are Mr. Nishit Khandelwal, Mr. Neeraj Kumar Singla and Mr. Vijay Kumar. The company is engaged in the business of carrying out real estate activities and owns a Commercial Project having a total leasable area of approximately 7.25 lakh sq.ft. The commercial project is completely leased out as on date.
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| Unsupported Rating |
| Not Applicable. |
| Analytical Approach |
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Acuite has considered standalone business and financial risk profile of Dwellings Star Developers Private Limited to arrive at this rating.
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| Key Rating Drivers |
| Strengths |
| Long Track of Operations
The company is now managed by Singla family as key promoters and had been the part of multiple project based SPV's for lease rental discounting under the brand name of SkymarkOne mainly in Delhi-NCR region. Currently, Tower-E, SkymarkOne, Sector 98, Noida, Uttar Pradesh is fully leased out with total leasable area of 7.25 lakh sq. ft. The project has a locational advantage of prime with a connectively of Yamuna Expressway, Noida-Greater Noida Expressway and Delhi Noda Direct (DND) Flyway. The project is close to Delhi Metro stations nearby as Botanical Garden (Blue line) and Okhla Bird Sanctury (Magenta Line). Improving Operating performance with strong clientele The company has entered into lease agreements with both corporate and retail stores with occupancy percentage of 99.64%. The company has received rentals of Rs. 48.02 Cr. in FY 25 (prov.) against Rs. 45.36 Cr. in FY 24. The expected rentals to be received by the company is ~Rs. 52 Cr. for FY 26. LOI's has been signed with strong & reputed clientele such as Airtel, Network 18 Media & Investments Limited, Simpliwork, Audi car showroom, PWC, Starbucks, Tim Hortens, Shoppers Stop, Domino's, Dunkin Donuts, etc. Acuite believes that the company will be able to achieve the improve in the rental in medium term with price escalation clause inbuilt as a part of their contracts with all tennants of 15 % for three years. Presence of DSRA, Escrow Account with Waterfall mechanism The company is required to maintain DSRA equivalent to three months of debt servicing (principle & interest) to be created upfront before disbursement and to be maintained throughout the tenor of the facilities. In addition to that, all the lease rentals will route through the escrow account and payment will be utilized as per the waterfall mechanism. Acuite believes that such structured mechanism allows a Company to have better control over its cash flows and debt servicing abilities. |
| Weaknesses |
| Presence in highly competitive and fragmented nature of industry
The real estate industry in India is highly fragmented, with most of the real estate developers having a city or region-specific presence. The risks associated with the real estate industry are cyclical in nature (drop in property prices) and interest rate risk, among others, which could affect operations. The company is exposed to lease renewal risk, i.e., while renewing the lease agreements, any significant renegotiations by the lessees can adversely impact the cash flows. |
| 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) |
| The company is required to maintain DSRA for three months of debt obligation along with the escrow and waterfall mechanism. |
| Rating Sensitivities |
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| Liquidity Position |
| Adequate |
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The liquidity profile of the company is adequate marked by healthy lease rentals routed through escrow mechanism and presence of DSRA for three months resulted into additional cushion. Further, the company espected to have a comfortable average DSCR of 1.51 from FY 26 to FY 31. Going forward, Acuite believes that liquidity profile of the company is expected to improve in near to medium term following by the comfortable DSCR.
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| Outlook - Stable |
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| Other Factors affecting Rating |
| None. |
| Particulars | Unit | FY 25 (Provisional) | FY 24 (Actual) |
| Operating Income | Rs. Cr. | 48.02 | 45.36 |
| PAT | Rs. Cr. | 13.28 | 8.87 |
| PAT Margin | (%) | 27.67 | 19.55 |
| Total Debt/Tangible Net Worth | Times | 2.46 | 2.94 |
| PBDIT/Interest | Times | 1.87 | 1.70 |
| Status of non-cooperation with previous CRA (if applicable) |
| None. |
| Any other information |
| None. |
| Applicable Criteria |
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• Default Recognition :- https://www.acuite.in/view-rating-criteria-52.htm • Service Sector: https://www.acuite.in/view-rating-criteria-50.htm • Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm • Lease Rental Discounting : https://www.acuite.in/view-rating-criteria-106.htm |
| Note on complexity levels of the rated instrument |
| Rating History : |
| Not Applicable. |
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