Press Release October 29, 2024 JIJAMATA ROAD NIRMITI PRIVATE LIMITED Rating Reaffirmed

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	43.00	ACUITE A- | Stable | Reaffirmed	-
Total Outstanding	43.00	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

­Acuite has reaffirmed its long term rating to 'ACUITE A-' (read as ACUITE A minus) on the Rs. 43.00 Cr. bank facilities of Jijamata Road Nirmiti Private Limited (JRNPL). The outlook is 'Stable'. Rating Rationale for reaffirmation The rating considers the completion of project before the scheduled time along with all the milestone payments received from PWD (Government of Maharashtra) and six annuity payments has been received by the company. Further, the rating factors in the adequate liquidity of the company in the form of DSRA maintained equivalent to 2 principal instalments and 12 months interest and escrow mechanism. Acuite has also considered the technical support and funding support in the form of corporate guarantee for the loan availed from the sponsor while arriving at the rating. However, the rating is constrained by risk related to delay in annuity payments and changes in operational and interest cost.

About the Company

­­Jijamata Road Nirmiti Private Limited (JRNPL), a Special Purpose Vehicle (SPV) incorporated on 19th February 2019 was set up to implement the project for development, maintenance and management of state highways and major district roads in Maharashtra. It also undertakes upgradation of Road joining two District places in Jalana and Buldhana District (Buldhana- Dhad) with a length of 17.764 km in Maharashtra (HAM 82A). It is carried by Mr. Girish Bhagwat Chaudhari, Mr. Rajesh Prakash Chaudhari & Mr. Arjun Bhivasan Kate.

Unsupported Rating

­Not Applicable

Analytical Approach

­For arriving at the rating, Acuité has considered the standalone credit profile of JRNPL. Further, Acuité has also considered DSRA which is created upfront  equivalent to 2 principal instalments and 12 months interest and escrow mechanism, as specified in the sanction letter while arriving at the rating.

Key Rating Drivers

Strengths

­Strong counterparty linked revenue profile The company has entered into a concession agreement with PWD (Govt. of Maharashtra) for improvement to roads in Jalana and Buldhana districts in Maharashtra on 6th of March 2019. The project was completed in July 2021 well ahead of the scheduled completion date, thus earning early completion bonus. The concession is granted to the company for 10 years after the CoD and during the concession bi-annual annuity payment would be paid by MPWD and the company has received the six annuity payments for the completed project. Along with annuity payments, interest shall be payable to JRNPL on reducing balance of completion cost at a rate equal to applicable bank rate plus 3 per cent. MPWD shall also reimburse O&M expenses adjusted to Price Index Multiple on the annuity payment dates to JRNPL. Strong operational and financial support from the sponsor BNC Power Projects Limited (BNCPPL) has decades of experience in the civil construction, electrical-transmission and substations segments. The sponsor holds 60.02% shares of the company and provides funds and technical support to the project. The company has achieved revenues of Rs. 102.89 Cr till August 2024. BNCPPL has a healthy order book of about ~Rs.1433 Cr. (unexecuted) till 31st August 2024 from electrical transmissions, substations and road divisions. The OB/OI stood at 4.33 times. The sponsor has provided corporate guarantees on the bank loans of the Company. Acuite believes that the sponsor is expected to provide technical or funding support in case of any exigency over the medium term. Waterfall Mechanism in ESCROW account and Debt-service reserve account (DSRA) The repayments for term loan will be recovered from Escrow account. JRNPL has escrow mechanism through which cash flows from Authority is routed and used for payment as per the defined payment waterfall. Only surplus cash flow after meeting operating expense, debt servicing obligation, and provision for major maintenance expense, can be utilised as per borrower’s discretion during the concession period. The debt service coverage ratio (DSCR) is expected to remain at over 1.34 times for the tenure of the loan. The company maintains DSRA in the form of fixed deposits to mitigate any unforeseen risk related to delay in annuity receipt.

Weaknesses

­Susceptibility to risks related to delay in receipt of annuity and changes in operational cost & interest rate As per the concession agreement, the company is expected to receive a semi-annual annuity. Any delay in timely receipt of the annuity could adversely impact debt-servicing ability. Along with fixed annuities, the project will receive interest payments on the balance annuities that are linked to the prevailing bank rate. The bank rate has reduced significantly in past couple of years which has impacted the project inflow as a large proportion of the cash inflow is from the interest on balance annuities. However, this risk is partially offset as the interest rate on debt is floating and is also expected to follow the trend in bank rates thus keeping DSCR in check. Further, the company is exposed to risks related to maintenance of the project. If the prescribed standards are not met, annuity payment may be reduced. Any significant delay and deduction in annuities could impact the debt servicing ability of the company. However, strong track record of sponsor, who is also the O&M contractor, is expected to mitigate this risk.

Rating Sensitivities

­Timely receipt of annuity payments from the Government Higher than expected O & M cost

Liquidity Position

Adequate

­JRNPL’s liquidity position is adequate marked by continuous support from the parent BNCPPL. The project was completed before the scheduled time and the company has started receiving the annuity from Maharashtra PWD since January 2022. The DSCR is expected to be adequate, and the company will maintain DSRA and cash collateral of debt obligation will cushion liquidity. Fund support is likely from sponsor for any exigency including O&M and major maintenance expenses. Acuite believes that the liquidity of JRNPL is likely to remain adequate backed by consistent support from sponsor and government in terms of annuity payments.

Outlook: Stable

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Other Factors affecting Rating

­None

Key Financials

Particulars	Unit	FY 24 (Actual)	FY 23 (Actual)
Operating Income	Rs. Cr.	2.40	6.47
PAT	Rs. Cr.	(0.29)	(1.46)
PAT Margin	(%)	(12.02)	(22.61)
Total Debt/Tangible Net Worth	Times	2.09	2.18
PBDIT/Interest	Times	0.94	0.68

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 • Service Sector: https://www.acuite.in/view-rating-criteria-50.htm • Infrastructure Sector: https://www.acuite.in/view-rating-criteria-51.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 01 Aug 2023 Term Loan Long Term 43.00 ACUITE A- | Stable (Assigned)

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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. 1.50 Simple ACUITE A- | Stable | Reaffirmed Bank of Maharashtra Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. 31 Oct 2030 41.50 Simple ACUITE A- | Stable | Reaffirmed

Contacts

Mohit Jain Senior Vice President - Rating Operations Manvi Khaitan 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. 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.