Press Release

Press Release

February 18, 2025

GANAPATI PARKS LIMITED
Rating Reaffirmed

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	51.09	ACUITE BBB- \| Stable \| Reaffirmed	-
Total Outstanding	51.09	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

Acuite has reaffirmed the long term rating at ‘ACUITE BBB-’ (read as ACUITE triple B minus) on the Rs. 51.09 crore bank facilities of Ganapati Parks Limited (GPL). The outlook is ‘Stable’.

Rating Rationale

The ratings reaffirmation for GPL reflects the steady and improving business risk profile of the property, the resourcefulness and willingness of the Ambuja-Neotia group to support the business operations demonstrated by regular infusion of funds in the form of unsecured loans. Further, Acuité has also taken into cognizance the improving nature of occupancy and ARR of the hotel properties. These strengths are however, partly offset by the below average financial risk profile of the company and highly competitive hotel industry.

About the Company

Incorporated in 1994, Ganapati Parks Limited (GPL) is a Kolkata based heritage plaza and a joint venture between Ambuja Neotia Group and Kolkata Municipal Corporation (KMC). Currently, management control of the company is with Neotia Group. The heritage plaza, namely, ‘Swabhumi’ focuses on showcasing the heritage and culture from various regions in the country, especially Bengal. Swabhumi has a 48 bedroom hotel ‘Taj Raajkutir’, 5 banquet halls ‘Raasmanch’, ‘Rangmanch’, ‘Rangdarbar’, ‘Santushti’ and ‘Velvet Lounge’, 3 restaurants ‘Loafer's Cafe’, ‘East India Room’ and ‘The Swig’ and several other adjoining facilities such as spa & swimming pool, sports bar & lounge and an artisans gallery. Moreover, GPL has entered into a hotel operating agreement with India Hotel Company Limited for the management of the boutique hotel under the brand “SeleQtion”.

Unsupported Rating

Acuite BB/Stable

Analytical Approach

Acuité has taken a standalone view of the business and financial risk profile of GPL to arrive at the rating of GPL, Acuité has taken into account a strong level of support from the Ambuja-Neotia group given that Ambuja Neotia Holdings Private Limited (ANHPL) has a significant stake in GPL indirectly.

Key Rating Drivers

Strengths

Experienced management
The Ambuja-Neotia group has a long operational track record in the hospitality industry of around four decades. In addition to this, the promoter is highly experienced and actively involved in the operations of the company. The group also has financial resourcefulness to infuse need based funds into GPL though its various group entities. Acuité believes that the long operational track record of the group and promoters’ extensive understanding and expertise will support the company’s growth plans going forward.

Improving revenues and occupancy levels
The company generated Rs 37.63cr of revenues in FY2024 as compared to Rs. 28.92cr in FY2023, majorly due to increase in revenues from Food and Beverage segment (72.36% in FY2024) and improving average rental rates (ARR). The EBITDA margins stood improved at 30.02% in FY2024 however the PAT margins remained negative at -22.87% over the same period. Improvement in operating income with better cost absorption has improved company performance on EBITDA level, however interest costs on unsecured loans, long term debt and depreciation of construction costs of new capex for expanding hotel rooms, have affected the company’s net profit. The occupancy rate of the hotel has also improved to 76.60% in FY2024 vis-à- vis 67% in FY2023. The uptrend in occupancy continues in FY2025 as reflected from year-to-date (December 2024) occupancy of 75.67% and is expected to be higher for the year end mainly due to seasonal nature. Further, the average room rate (ARR) stood at an average of Rs. 7123 in FY2024 and at Rs. 7118 till December 2024. This is expected to improve with the wedding and tourist season. In addition to this, the F&B revenues were reported at around 70 percent of the total revenues of Rs.22.79 Cr in FY2023 due to 5 luxurious banquet halls and 3 restaurants. Acuité believes the occupancy levels and ARR of the hotel are expected to improve in the medium term.

Financial flexibility of the Ambuja-Neotia group
The Ambuja-Neotia Group has been promoted by the Neotia Family, which has been an integral part of the business community in Kolkata for nearly 125 years. The group through its various Joint Venture Companies and Special Purpose Vehicles (SPVs) has been engaged in development of Real Estate properties, both housing and commercial complexes and in the Hospitality business.The group has strong financial risk profile with a willingness to support their businesses, demonstrated from the continuous infusion of unsecured loans and equity funds into GPL. The group over the years has infused upto Rs. 86.53 Cr as on FY2024 to support the business operations of the company. Acuité believes that GPL, being a strategically important entity for the group shall continue to benefit from the financial, operational and management support from the Ambuja-Neotia Group as and when required.The subsidiary company of Ambuja Neotia Holdings Private Limited(AMHPL) that is Ambuja Neotia Hotel Ventures Ltd (ANHVL) holds around 51.42 per cent in GPL which imparts further comfort to the rating.

Weaknesses

Weak Financial Risk Profile

The tangible net worth of the company stood at Rs. - 76.32Cr as on March 31, 2024 as compared to Rs. - 67.60Cr as on March 31, 2023. The tangible net worth of the company has been eroded due to continuous accumulated losses.The gearing of the company stood at -1.70 times as on 31st March, 2024. The increase in term loans as on 31st March,2024 is due to takeover of loans from Axis Bank by ICICI Bank. The company benefited from reduced interest costs and current debt obligations due to the same.The Total Outside Liabilities/Tangible Net Worth (TOL/TNW) stood at -1.88 times as on March 31, 2024 as compared to -2.07 times as on March 31, 2023, due to negative net worth and increase in debt. The debt protection metrices of the company improved, marked by Interest coverage ratio (ICR) of 1.04 times in FY2024 (PY 0.71x) and debt service coverage ratio (DSCR) of 0.64 times for FY2024(PY 0.56x). Corporate Guarantee has been provided on behalf of Ambuja Housing and Urban Infrastructure Company Ltd. till the NOC from Kolkata Municipal Corporation. The leased land on which the hotel is situated has a lease tenure of 10 years and the same is due for renewal in 2027. The company is planning on converting the same into freehold land to benefit from reduced rental cost.

Working capital intensive nature of operations
The working capital management of the company is intensive marked by Gross Current Assets (GCA) of 243 days for FY2024 as compared to 303 days for FY2023. The current assets also include high cash & bank balance on year end at Rs. 18.34 Cr mainly due to influx of unsecured loans from promoters. The inventory days of the company stood at 17days in FY2024 as compared to 15 days in FY2023. Inventory is required for hotel supplies and liquor like wines etc. The debtor days stood at 38 days in FY2024 against 46 days in FY2023. Days payable outstanding stood at 56 days against 248 days in FY2023. The reduction in creditor days was because of introduction of new MSME act because of which the company must make payments to the creditors within 45 days. The bank limit utilisation stood at ~89% on an average for 6 months ended December 2024, however as on 31st March 2024 the overdraft facility utilisation stood nil.

Highly competitive industry
The Indian subcontinent with vast opportunities and potential for high growth has become the focus area of major international chains. Several of these chains have established and others have their plans to establish hotels to take advantage of these opportunities. These entrants are expected to intensify the competitive environment. Acuité believes the success of the company will be dependent upon its ability to compete in areas such as room rates, quality of accommodation, service level and convenience of location and also the quality and scope of other amenities, including food and beverage facilities.

Rating Sensitivities

Improvement in the operations while increasing momentum in occupancy levels and ARR of the hotel
Any withdrawal of support from the group
Any deterioration of its financial risk profile and liquidity position

Liquidity Position

Stretched

The liquidity of GPL continues to remain stretched due to accumulated losses, low current ratio, long term debt repayments. However, it remains supported by the financial flexibility availed from group’s unsecured loan from time to time on need basis. GPL has incurred losses during last 3 years on account of stabilisation challenges of the hotel post pandemic and lowbrand recall. Against the same, the Company has debt repayments of about Rs.7.89 Cr which are being met out of unsecured loan support from group companies. However, the company’s net cash accruals (has turned positive for first time since inception), of Rs. 0.54Cr. as on March 31, 2024 as against Rs. 7.63 Cr. long term debt obligations over the same period. The same is being met out of USL infused by the group and parent company(s). As on March 31, 2024, the support in the form of unsecured loans from group companies stood at Rs. 86.53 Cr. The current ratio of the company stood at 1.29 times in FY2024, on account of nil short term debt as on 31st March,2024. The cash and bank balance stood at Rs.18.34Cr. for FY2024. Acuité believes that going forward the liquidity position of the company will improve marginally on the back of improving margin,continued support from group in the form of unsecured loans over the medium term.

Outlook: Stable

Other Factors affecting Rating

None

Key Financials

Particulars	Unit	FY 24 (Actual)	FY 23 (Actual)
Operating Income	Rs. Cr.	37.63	28.92
PAT	Rs. Cr.	(8.61)	(11.51)
PAT Margin	(%)	(22.87)	(39.79)
Total Debt/Tangible Net Worth	Times	(1.70)	(1.79)
PBDIT/Interest	Times	1.04	0.71

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

Not Applicable

Any other information

None

Applicable Criteria

• Default Recognition :- https://www.acuite.in/view-rating-criteria-52.htm
• Rating Process and Timeline: https://www.acuite.in/view-rating-criteria-67.htm
• Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm
• Group And Parent Support: https://www.acuite.in/view-rating-criteria-47.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

Date	Name of Instruments/Facilities	Term	Amount (Rs. Cr)	Rating/Outlook
11 Dec 2023	Secured Overdraft	Long Term	7.50	ACUITE BBB- \| Stable (Reaffirmed)
	Proposed Long Term Bank Facility	Long Term	13.59	ACUITE BBB- \| Stable (Reaffirmed)
	Term Loan	Long Term	29.00	ACUITE BBB- \| Stable (Reaffirmed)
	Secured Overdraft	Long Term	1.00	ACUITE BBB- \| Stable (Reaffirmed)
06 Oct 2022	Term Loan	Long Term	21.92	ACUITE BBB- \| Stable (Reaffirmed)
	Secured Overdraft	Long Term	10.00	ACUITE BBB- \| Stable (Reaffirmed)
	Secured Overdraft	Long Term	7.50	ACUITE BBB- \| Stable (Reaffirmed)
	Proposed Long Term Bank Facility	Long Term	11.67	ACUITE BBB- \| Stable (Reaffirmed)

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 Long Term Bank Facility	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	16.33	Simple	ACUITE BBB- \| Stable \| Reaffirmed
ICICI Bank Ltd	Not avl. / Not appl.	Secured Overdraft	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	1.00	Simple	ACUITE BBB- \| Stable \| Reaffirmed
Axis Bank	Not avl. / Not appl.	Secured Overdraft	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	7.50	Simple	ACUITE BBB- \| Stable \| Reaffirmed
ICICI Bank Ltd	Not avl. / Not appl.	Term Loan	31 Jul 2023	Not avl. / Not appl.	31 Jul 2038	26.26	Simple	ACUITE BBB- \| Stable \| Reaffirmed

*Annexure 2 - List of Entities (applicable for Consolidation or Parent / Group / Govt. Support)

Sr.No	Company Names
1	Ambuja Neotia Holdings Private Limited
2	GANAPATI PARKS LIMITED

Contacts

Mohit Jain
Senior Vice President - Rating Operations

Dibyendu Roy
Associate 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.

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