Product Quantum (Rs. Cr) Long Term Rating Short Term Rating
Bank Loan Ratings 20.00 ACUITE BB | Stable | Upgraded -
Total Outstanding Quantum (Rs. Cr) 20.00 - -
 
Rating Rationale
­Acuité has upgraded the long-term rating to ‘ACUITE BB‘ (read as ACUITE Double B) from ‘ACUITE B’ (read as ACUITE B) on the Rs. 20.00 crore bank facilities of Hamilton Land Developers Private Limited (HLDPL).
The outlook is ‘Stable’.

Rationale for Upgrade
The upgrade in rating takes into account the experience of the company in executing residential projects and the expected inflows from the under construction project “Hamilton Mayfair Residency” to support debt servicing ability of the company. However rating is constrained on account of delays in commencement of the project and sluggish pace of the project. Going forward, timely completion of project and the offtake of units will remain key rating monitorables going forward.
 

About the Company
­Hamilton Land Developers Private Limited (HLDPL), is a Jalandhar (Punjab) based firm incorporated in 2005 by Mr. Rakesh Sabharwal and Mr. Sharad Aggarwal. The firm is engaged in the development of residential projects. HLDPL is currently developing its residential project "Hamilton Mayfair Residential" at Jalandhar.
 
Analytical Approach
­The team has considered the standalone financials of Hamilton Land Developers Private Limited to arrive at the rating.
 

Key Rating Drivers

Strengths
­Experienced Promoters
The directors of the company Mr. Sharad Aggrawal and Mr. Rakesh Kumar Sabharwal possess experience of around a decade in real estate industry and well established presence in Jalandhar, Punjab and have completed around 10 projects.

Project Overview
Company has an under construction project by the name of “Hamilton Mayfair Residency”. Project’s construction has started in August 2016 and is expected to be completed by December 2024. Project has total land area of 2,98,821.00 Sq Ft. with total saleable area of 5,00,800.00 Sq. Ft. having 323 units. Up till December 2022 company has sold 2,63,700 Sq. Ft. and 189 units. Total construction cost of the project is Rs. 141.80 Cr out of which company has incurred Rs. 76.13 Cr up till December 2022. Company has done collections of Rs. 25.42 Cr up till December 2022.
Weaknesses
­Inherent cyclicality in the construction sector
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 nature of business (drop in property prices), interest rate risk etc.
Rating Sensitivities
  • ­Pace of project.
  • Offtake and booking of units.
 
Material covenants
­None.
 
Liquidity Position
Adequate
Company has adequate liquidity position. Company has taken external loan of Rs. 20.00 Cr for the project which the company will be able to pay in a comfortable manner from the cash flows generated from the project.
 
Outlook: Stable
­Acuite believes HLDPL will maintain its business risk profile in the medium term on the back of experienced management and established presence of the group in the real estate industry. The outlook may be revised to 'Positive' if the firm generates steady cash flows from customer advances. Conversely, the outlook may be revised to 'Negative' in case of stretch in the firm's liquidity position on account of delays in project execution or collection of booking money.
 
Other Factors affecting Rating
­None.
 

Particulars Unit FY 22 (Actual) FY 21 (Actual)
Operating Income Rs. Cr. 35.94 7.91
PAT Rs. Cr. 3.51 0.40
PAT Margin (%) 9.75 5.03
Total Debt/Tangible Net Worth Times 5.31 9.17
PBDIT/Interest Times 2.34 1.09
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
• 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.
 

Date Name of Instruments/Facilities Term Amount (Rs. Cr) Rating/Outlook
08 Apr 2022 Term Loan Long Term 20.00 ACUITE B ( Issuer not co-operating*)
07 Sep 2020 Term Loan Long Term 20.00 ACUITE B (Issuer not co-operating*)
­

Lender’s Name ISIN Facilities Date Of Issuance Coupon Rate Maturity Date Quantum (Rs. Cr.) Complexity Level Rating
Union Bank of India Not Applicable Term Loan Not available Not available Not available 20.00 Simple ACUITE BB | Stable | Upgraded

Contacts
Analytical Rating Desk
About Acuité Ratings & Research
Acuité Ratings & Research Limitedwww.acuite.in