Press Release

Press Release

September 11, 2024

ECOBOX INDUSTRIALS ASSET III PRIVATE LIMITED
Rating Assigned

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Non Convertible Debentures (NCD)	62.00	ACUITE BB+ \| Stable \| Assigned	-
Total Outstanding	62.00	-	-

Rating Rationale

Acuité has assigned its long term rating of ‘ACUITE BB+’ (read as ACUITE Double B plus) on the Rs. 62.00 Cr. Non-Convertible Debentures of Ecobox Industrials Asset III Private Limited (EIAPL - III). The outlook is 'Stable'.

Rationale for Rating
The rating assigned factors in EIAPL - III's strong parent support from Rava Partners which is a Singapore based fund house. Rava Partners has committed more than USD $2 billion to real assets businesses spanning the warehousing, logistics, and supply chain sectors. Ecobox group of entities is one such warehousing venture of Rava Partners. However, execution risk of proposed acquisition constrains the rating. Ecobox group of entities is in the process of acquiring 3 operational industrial warehousing assets, housed under 4 different existing SPVs, from a seller. The proposed acquisition is currently at nascent stage with high funding and execution risk. Going forward, timely completion of the proposed acquisition without cost overruns will be a key rating monitorable.

About the Company

Ecobox Industrials Asset III Private Limited incorporated in July, 2024, is a new investment venture of Rava Partners. A special purpose vehicle formed for the purpose of acquiring a warehousing asset at Sricity, Tirupati. The company is currently managed by Mr. Abhay Goyal and Mr. Ashish Shah.

Unsupported Rating

Not Applicable.

Analytical Approach

Acuité has considered the standalone business and financial risk profiles of Ecobox Industrials Asset III Private Limited to arrive at this rating.

Key Rating Drivers

Strengths

Strong Parentage:
EIAPL – III is a part of Ecobox group of entities, which is promoted by Singapore based fund house Rava Partners. Rava Partners builds real asset platforms in growth sectors of Asia’s economy such as education, logistics / industrial, life sciences / healthcare, digital infrastructure and other specialized asset classes. Since launching its real assets business, Rava Partners has committed more than USD $2 billion to real assets businesses spanning the warehousing, logistics, and supply chain sectors. Rava Partners was established by Hillhouse Investment together with senior management of Rava. Hillhouse Investment (“Hillhouse”) is a global alternative investment manager with a range of investment strategies that span public equities, private equity (across buyout, venture capital and growth strategies), private credit and real assets. The firm manages capital for global institutions, including non-profit foundations, endowments, and pensions. Based in Singapore, the global investment firm has an international team working in offices in Mumbai, London, New York, Sydney, Hong Kong, Beijing, Shanghai, and Amsterdam. Ecobox group is in the process of acquiring 3 operational industrial warehousing assets, housed under 4 different existing SPVs, from a seller. The total asset size is ~2.6 mn sq ft. The existing SPVs will be acquired by way of a share purchase agreement. For this, the parent group has created 4 new SPVs which will buy the shareholding of these existing SPVs from the seller. EIAPL-III is one of the entities of this transaction, which will acquire 100 percent shareholding in one of the seller entities from its existing promoters. The warehousing asset is located at Sricity, Tirupati.

Adequacy of operational cashflow from warehouses to be acquired
Ecobox group is in the process of acquiring 3 operational industrial warehousing assets, housed under 4 different existing SPVs, from a seller. The 3 warehouses at a consolidated level are estimated to generate DSCR in the range of 1.23 – 1.35 times. EIAPL – III will be acquiring 100% stake in one of the seller entites which owns the warehousing asset located at Sricity, Tirupati. At a standalone level, the DSCR from the asset is estimated to be in the range of 1.12-1.25 times.

Weaknesses

Execution Risk:
The proposed transaction i.e. purchase of warehousing asset by EIAPL - III vide share purchase in seller entity is currently under process with infusion of both debt and equity funding pending. The acquisition is estimated to cost around ~Rs. 47.40 Cr. which is to be funded by equity or compulsorily convertible debentures to the tune of Rs. 27.90 Cr. and balance vide issue of listed non-convertible debentures. Acuite believes the proposed acquisition is currently at nascent stage with high funding and execution risk. Timely completion of the proposed acquisition without cost overruns will be a key rating monitorable.

Rating Sensitivities

Timely completion of proposed acquisition without cost overruns
Retained occupancy of warehouses that are to be acquired.

Liquidity Position

Adequate

The liquidity position is marked adequate basis the strong parentage of EIAPL-III and expected support from them in case of any exigencies. Further, post completion of proposed acquisition liquidity is estimated to remain adequate marked by sufficient net cash accruals against repayment obligations.

Outlook: Stable

The Outlook is ‘Stable’ driven by strong parentage of the company. The outlook may be revised to 'Positive' in case of timely completion of proposed acquisition without any cost overruns. Further, the outlook can be changed to 'Negative' in case of delay in proposed debt or equity funding in the company which would delay the proposed acquisition.

Other Factors affecting Rating

None.

Key Financials :

The company is incorporated on July 31, 2024, financial statements for the year are not available.

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
Not Applicable	Not avl. / Not appl.	Proposed Non Convertible Debentures	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	62.00	Simple	ACUITE BB+ \| Stable \| Assigned

Contacts

Analytical Details	Contact Details
Mohit Jain Senior Vice President - Rating Operations Tel: 022–49294017 mohit.jain@acuite.in Dhruvi Chauhan Associate Analyst - Rating Operations Tel: 022-49294065 dhruvi.chauhan@acuite.in	Contact details exclusively for investors and lenders Mob: +91 8591310146 Email ID: analyticalsupport@acuite.in Tel: 022-49294011 rating.desk@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.