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 upgraded its long term rating to 'ACUITE BBB' (read as ACUITE triple B) from 'ACUITE BB+' (read as ACUITE double B plus) on the bank facilities of Rs.350.00 Crore of Elan Limited. The outlook is 'Stable'.
Rationale for Rating
The rating upgrade and migration from 'Issuer Non-Cooperating' factor in the group's healthy sales velocity, reflected in robust inventory absorption across its projects, and the sustained growth in customer advances, which has supported cash flow generation and strengthened liquidity. The group's diversified presence across both residential and commercial real estate segments mitigates asset concentration risk to an extent and supports business resilience. Further, the group has already sold around 85% of the inventory in its launched projects, providing strong revenue visibility and cash flow support. Customer advances increased to Rs. 4,189.12 Cr. as on July 31, 2026, from Rs. 3,432.01 Cr. as on July 31, 2025, indicating continued healthy demand and collections. The rating continues to derive strength from the group's healthy business risk profile, supported by strong booking levels, steady customer receipts from ongoing projects, and comfortable debt servicing indicators. Acuité also takes cognizance of the group's established market position in the Gurugram real estate market, which supports demand visibility and limits funding risk. However, the rating remains constrained by execution risks associated with certain projects that are at an initial stage of development, geographical concentration of revenues, and the inherent cyclical nature of the real estate industry. Going forward, the group's ability to maintain healthy collection efficiency across projects, timely execution of ongoing developments, and prudent financial management will remain key rating sensitivities.
About the Company
Incorporated in 2013 Elan Limited is based in Gurugram. The company is engaged in Real estate construction activities. The directors are Mr. Ravish Kapoor, Mr. Akash Kapoor and Mr. Gaurav Khandelwal.
About the Group
Elan Avenue Limited
Incorporated in 2007, Elan Avenue Limited is based in Gurugram. The Company is engaged in the Real Estate Industry. The directors are Mr. Ravish Kapoor, Mr. Akash Kapoor and Mr. Gaurav Khandelwal.
Elan Imperial Private Limited
Incorporated in 2008 Elan Imperial Private Limited is based in Gurugram. It is a part of Elan Group and is into the business of real estate development. The directors are Mr. Ravish Kapoor, Mr. Akash Kapoor and Mr. Gaurav Khandelwal.
Unsupported Rating
Not applicable
Analytical Approach
Extent of Consolidation
•Full Consolidation
Rationale for Consolidation or Parent / Group / Govt. Support
Acuité has consolidated the financial and business risk profile Elan Limited and its fully owned subsidiaries, Elan Avenue Limited and Elan Imperial Private Limited collectively referred to as the Elan Group all have common management and similar line of business.
Key Rating Drivers
Strengths
Experienced promoters with established track record of operations
Elan Group is promoted by Mr. Ravish Kapoor, Mr. Akash Kapoor and Mr. Rakesh Kapoor. Mr. Ravish Kapoor has been overseeing sales and marketing of the company and Mr Akash Kapoor is responsible for group’s operations across the finance and administrative verticals. They have been in the real estate business for more than 15 years, and their extended market presence has aided the business in building strong client relationships. The promoters have a wealth of knowledge in the micro market because the group has completed several commercial projects in the Gurugram area in the past. The group is planning to launch 8 news projects. Upcoming projects will majorly be funded from internal accruals limiting the funding risk.
Healthy booking progress and customer advances.
The group's credit profile is supported by its healthy booking momentum and strong customer advances. Across its launched projects, approximately 85% of the saleable inventory has already been sold, reflecting robust demand and strong market acceptance. Consequently, customer advances increased to Rs. 4,189.12 Cr. as on July 31, 2026, from Rs. 3,432.01 Cr. as on July 31, 2025, indicating sustained sales traction and healthy collections from customers. The group has also witnessed steady inflows from advances against both commercial and residential properties, providing strong support to its liquidity position. The healthy sales velocity provides adequate visibility of future cash flows. As on July 31, 2026, the group had collected approximately 34% of the total sales value, against an overall construction progress of 45.82% across its ongoing projects. Further, the group is expected to generate significant cash inflows from pending receivables, customer advances from sold inventory, and future sales bookings. These expected inflows are considered adequate to fund the remaining construction cost of ongoing projects and support the group's financial flexibility over the medium term.
Comfortable expected debt service coverage ratio
The project under development is funded by a combination of debt, customer advances and promoter funds. The group's high cash flow coverage ratio throughout the loan tenure indicates that it is expected to have enough cash flow to fulfil its debt commitments. The overall cash flow for the group seems comfortable.
Weaknesses
Exposure to Execution risk and Funding Risk
The group is undertaking construction of a residential and commercial project wherein at the group level 45.82% of the project is completed as on July 2026 and the balance is yet to be constructed; hence, it is exposed to implementation risk.
The liquidity generated from already completed projects and the presence of fund fungibility across all the projects mitigate the funding risk to a certain extent; however, any delay or slow progress in collection from customers will result into additional borrowing and hence the collection efficiency needs to be closely monitored.
Susceptibility to Real Estate Cyclicality and Regulatory Risks
The real estate industry in India is highly fragmented, with most of the real estate developers having a city-specific or region-specific presence. The risks associated with real estate industry are cyclical in nature and directly linked to drop in property prices and interest rate risks, which could affect the operations. Given the high level of financial leverage, the high cost of borrowing prevents the real estate developers from significantly reducing prices to boost sales growth. Moreover, the industry is also exposed to certain regulatory risks linked to stamp duty and registration tax directly impacting the demand and thus the operating growth of real estate players.
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 interest payment.
ESG Factors Relevant for Rating
ELAN Group demonstrates a strong commitment to ESG principles by integrating sustainability into its core business. Environmentally, the company focuses on green building practices, waste management, and the use of treated water. Socially, the Elan Foundation actively works to uplift communities through health, education, and disaster relief initiatives. The company also prioritizes employee well-being, fostering a safe and growth-oriented work environment. Strong corporate governance ensures transparency and ethical conduct, creating a framework for long-term value creation for all stakeholders, including the community and the environment.
Rating Sensitivities
Potential triggers (individual or collective) for an upward rating action:
More than expected overall collection from committed receivables and unsold inventory.
Timely realization of customer advances pending from sold inventory.
Timely completion of the ongoing project.
Average DSCR remains above 2 times on a sustained basis.
Potential triggers (individual or collective) for a downward rating action:
Sharp decline in cash flow due to slackened saleability of the project or delays in project execution.
Lower than expected sales traction leading to increased dependence on debt.
Average DSCR falls 1 time.
Liquidity Position
Adequate
The liquidity position of the group is adequate, supported by healthy sales velocity across its ongoing projects and strong customer advance collections. The group is expected to generate cash surpluses in the range of Rs. 1,000-2,000 Cr. each during FY27 and FY28, against scheduled debt obligations of around Rs. 400-700 Cr. during the respective periods. Further, the group is expected to maintain a comfortable debt servicing ability, reflected by an estimated DSCR of 2-3 times over FY27-FY32. The liquidity profile is also supported by the maintenance of a Debt Service Reserve Account (DSRA) of Rs. 15.47 Cr., equivalent to approximately three months of interest obligations. Acuité believes that the healthy expected cash accruals, coupled with moderate debt repayment requirements and adequate financial flexibility, will continue to support the group's liquidity position over the medium term.
Outlook: Stable
Other Factors affecting Rating
None
Particulars
Unit
FY 26 (Actual)
FY 25 (Actual)
Operating Income
Rs. Cr.
152.88
283.87
PAT
Rs. Cr.
(161.59)
26.26
PAT Margin
(%)
(105.69)
9.25
Total Debt/Tangible Net Worth
Times
1.45
(2.43)
PBDIT/Interest
Times
(3.29)
2.73
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
ELAN Limited
2
ELAN Avenue Limited
3
ELAN Imperial Private Limited
Contacts
List of instruments and names of regulators of the instruments
