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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Non Convertible Debentures (NCD) | 46.00 | ACUITE C | Assigned | Provisional To Final | - |
| Non Convertible Debentures (NCD) | 4.00 | Not Applicable | Withdrawn | - |
| Total Outstanding Quantum (Rs. Cr) | 46.00 | - | - |
| Total Withdrawn Quantum (Rs. Cr) | 4.00 | - | - |
| Rating Rationale |
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Acuité has converted its provisional long term rating of "Provisional ACUITE C" (read as Provisional ACUITE C) to final long-term rating of "ACUITE C" (read as ACUITE C) on the Rs.46 Cr Non-Convertble Debentures of GHK Hospitality and Infrastructures Limited (GHIL). The conversion of the rating from provisional to final reflects satisfactory completion of the following documentation as required by Acuité: 1. Final NCD term sheet 2. Debenture trust deed 3. Inter-creditor agreement Further, Acuite has withdrawn its rating on the Rs.4 Cr Non-Convertible Debentures of GHK Hospitality and Infrastructures Limited (GHIL). The withdrawal is on the basis of request received from the Client and in line with Acuite's policy on withdrawal of ratings. Rationale for Rating Assigned The rating assigned takes into account intances of delays observed in servicing of term loan obligations by GHIL. As per the credit bureau information reports and term loan account statements, GHIL has delayed in servicing of debt obligations for April and May, 2023. |
| About the Company |
| Pune-based GHK Hospitality & Infrastructures Limited (GHIL) (formerly known as St. Laurn Hotels Limited) was incorporated in 2007. GHIL is a single hotel company that owns the 5-star hotel named "Welcomhotel" in Ahmedabad. The centrally located business hotel is a 131-key property at Ashram Road which is the commercial business district in Ahmedabad. GHIL is a closely held company, with the members of the Karia family holding 100% of the equity. The company is currently run under the leadership of Mr. Rajesh Gopichand Karia and Mr. Suunil Gopichand Kariyaa. |
| Analytical Approach |
| Acuite has taken standalone approach of GHIL to arrive at the rating |
Key Rating Drivers
| Strengths |
| Experienced Management The company was incorporated in 2007 and the promoter - directors Mr. Rajesh Gopichand Karia and Mr. Suunil Gopichand Kariyaa have experience of more than 1.5 decades in the hotel industry. |
| Weaknesses |
| Weak Financial Risk Profile The company has a weak financial risk profile marked by a negative net-worth of Rs.(22.78) Cr as on March 31, 2023 as against Rs. (12.78) Cr as on March 31, 2022. The overall gearing stood at (3.50) times as on March 31, 2023 as against (4.59) times as on March 31, 2022. The interest coverage stood at (0.61) times for FY2023 as against (0.08)times for FY2022. Instance of delays in servicing of debt obligations There have been numerous instance of delays in servicing of debt obligations incase of term loan facility (LAP) running with Indiabulls Commercial Credit Ltd. As per the credit bureau information reports and term loan account statements, GHIL has also delayed in servicing of debt obligations for April and May, 2023. |
| Rating Sensitivities |
| > Timely servicing of debt obligations |
| Material covenants |
| None |
| Liquidity Position |
| Poor |
| The liquidity position is poor marked by inadequate net cash accruals against repayment obligations. The company generated net cash accruals of Rs. (8.61) in FY2023 against repayment obligations of Rs. 1.57 Cr during the period. |
| Outlook : Not Applicable |
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| Other Factors affecting Rating |
| None |
| Particulars | Unit | FY 23 (Actual) | FY 22 (Actual) |
| Operating Income | Rs. Cr. | 4.16 | 1.88 |
| PAT | Rs. Cr. | (10.01) | (6.87) |
| PAT Margin | (%) | (240.48) | (364.87) |
| Total Debt/Tangible Net Worth | Times | (3.50) | (4.59) |
| PBDIT/Interest | Times | (0.61) | (0.08) |
| Status of non-cooperation with previous CRA (if applicable) |
| Not Applicable |
| 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 |
| 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. |
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