Press Release

Press Release

January 16, 2025

JUPITER CAPITAL PRIVATE LIMITED
Rating Reaffirmed

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Non Convertible Debentures (NCD)	230.00	ACUITE A- \| Stable \| Reaffirmed	-
Total Outstanding	230.00	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

Acuité has reaffirmed the long term rating of 'ACUITE A-' (read as ACUITE A minus) on the Rs. 230.00 Cr. Secured Redeemable NonConvertible Debentures of Jupiter Capital Private Limited (JCPL). The outlook is 'Stable'.

Rationale for the rating

The rating continues to factor in experienced management and resourceful promoters and the ability of the company to grow its networth by way of internal accruals. The rating also factors in the high capitalization levels with networth of Rs. 1,675.77 Cr. as on September 30,2024 . The capital adequacy ratio stood at 56.66 percent as on September 30,2024 and 57.23 percent as on March 31, 2024 coupled with low gearing of 0.11 times as on September 30,2024. The rating derives comfort from proven track record of investments and divestments. The rating also derives strength from the underlying DSRA and Structure Payment Mechanism of the proposed Non-Convertible Debentures. The rating is, however, constrained due to its volatile nature of its revenue and high write offs done in the past.

About the company

Bangalore based, Jupiter Capital Private Limited (“JCPL”) was incorporated in 2004, as an Investment & Financial services firm headquartered in Bangalore. JCPL has been registered as an NBFC-SI with RBI since September, 2009. JCPL has an extensive portfolio of public and private investments through acquisitions, direct investments joint ventures and debt book. The company makes investment across sectors with focus on Engineering & Technology Services, Media & Entertainment, Hospitality & Wellness, Real Estate & Infrastructure and Technology-enabled consumer internet and business platforms. JCPL’s co-investors include global leaders such as Star, Goldman Sachs, Cisco and NOL. JCPL also owns an aircraft and provides charter flight services.

Unsupported Rating

ACUITE BBB/ Stable

Analytical Approach

Acuité has considered the standalone financial and business risk profile of JCPL to arrive at the rating. Further, the rating also takes the support of the presence of internal credit enhancement proposed in the form of Debt Service Reserve Account (DSRA) and the Structured Payment mechanism. The rating in respect of the NCD of Rs. 230.00 Cr. factors in the presence of a DSRA in form of 10 percent of the outstanding principal amount. DSRA needs to be maintained in the form of cash, bank fixed deposit, ‘AAA’ rated debt securities and sovereign debt securities, in any combination, for the minimum duration covering the tenor of the NCDs along with the T structure. The differential in the ratings of regular bank facilities vis. a vis. the rating on the NCDs is on account of these structures.

Key Rating Drivers

Strength

Resourceful promoter supported by experienced management team

The operations of JCPL are overseen by the Board of Directors with the support of qualified and experienced management team. The management of JCPL is led by Mr. Venkatraman V who has prior experience in the areas of Investment Banking, Corporate Finance, Venture Development and Management, etc and has also held leading positions in banks. The management of JCPL also comprises of CFO and Investment Director, all of whom have prior experience in the Financial Services Sector and have demonstrated the ability to survive through business cycles. Apart from overseeing the day-to-day operations, the management team is responsible for making investments and divestments decisions.
Acuité believes that the company will continue to benefit from its experienced Management Team backed by a resourceful promoter which will aid the company in its future growth trajectory.

Proven track record of investments
JCPL started its operations in the year 2005 and over the years, they have built an equity book having a book value of Rs. 1,437.79 Cr. as on September 30, 2024. These investments have been made out of owned funds and along with large brand strategic investors. These investments are made in emerging sectors especially technology focused sectors, along with strategic global partners, ultimately all critical deciding factors are aimed towards value creation. First set of investments happened in FY2009; followed by another set during FY2014, FY2019 and FY2021.
Acuité believes that the company will benefit from the demonstrated ability of the management in making investments and divestments.

Weakness

Volatility of Income
JCPL started its operations with a focus on building its Equity book.However, the revenue from equity book depends highly on the return on investment/gains i.e. profits on sale of investments which in turn depends on the performance of a particular industry/sector in which it has invested. JCPL’s top 3 investments comprise around 71 percent of its total equity book in which JCPL has majority shareholding. JCPL’s earning profile is largely dependent on the performance, profitability and valuations of these companies. In order to mitigate this volatility, JCPL has expanded its operations to creating a debt book as well since FY2018. The debt book however has moderate asset quality, albiet improving, where the debt book saw delinquencies with GNPA of 3.58 percent and NNPA being nil as on H1FY2025.The company’s debt book of ~Rs. 253.47 Cr. as on September 30, 2024 is likely to remain stable for near to medium term. Acuité believes that the ability of the company and management to mitigate the risks associated with volatility of income would be crucial.

ESG Factors Relevant for Rating

Jupiter Capital Private Limited (JCPL), has a diversified revenue stream with a majority portion accruing from the financial services sector. Adoption and upkeep of strong business ethics is a sensitive material issue for the financial services business linked to capital markets to avoid fraud, insider trading and other anti-competitive behaviour. Other important governance issues relevant for the industry include management and board compensation, board independence as well as diversity, shareholder rights and role of audit committee. As regards the social factors, product or service quality has high materiality so as to minimise misinformation about the products to the customers and reduce reputational risks. For the industry, retention, and development of skilled manpower along with equal opportunity for employees is crucial. While data security is highly relevant due to company’s access to confidential client information, social initiatives such as enhancing financial literacy and improving financial inclusion are fairly important for the financial services sector. The material of environmental factors is low for this industry. The company’s board comprises of a total of three directors.

Rating Sensitivity

Changes in management
Decline in asset quality
Timeliness of monetization of investments

All Covenants

Upfront Pledge of shareholding of unencumbered, unrestricted, listed shares of Axiscades Technologies Limited (“Axiscades”) to the extent of at least INR 500m during tenor of facility. Share price for this purpose to be calculated as the average of the weekly high and low of the closing prices of Axiscades shares quoted on the National Stock Exchange (NSE) during the six months preceding the testing date. First testing date to be Deemed Date of Allotment. Subsequently, testing to be done monthly. Additional top-up of shares, if required, to be done within 5 business days of testing date.

Shall include but not be limited to the following

Part Sale of Issuer’s stake in BPL Medical/ Receipt of dividend from BPL Medical for a minimum amount of INR 500 m either directly or indirectly
Part sale of Issuer’s stake in Axiscades Technologies Limited (Axiscades) for a minimum amount of INR 1,000 m;
Part sale of Issuer’s stake in Asianet News and Media Private limited (AMEL) for a minimum amount of INR 750 m;
Part Sale of Issuer’s stake in Niraamaya Retreats Pvt Ltd for a minimum amount of INR 1,000 m; and Sale of any other investment held by the Issuer for a minimum amount of INR 750m as may be acceptable to the Subscriber.

The Issuer shall remain compliant with the following financial covenants during the tenor of the Facility and shall be tested on a quarterly basis and within 45 days from the end of each financial quarter starting June 30, 2022

The external credit rating of the Issuer to be a minimum of BBB and the Issuer to complete a fresh external rating on or before April 30, 2022 and then within 90 days from end of each financial year
Total Networth of the Issuer to be a minimum of INR 15.0b and Capital Adequacy Ratio to be at least 50%
Total Net Debt (Total financial indebtedness less any cash and cash equivalents (fixed deposits, short term debt Mutual fund units)/ Total Adjusted Networth (defined Share Capital plus reserves and surplus less revaluation reserve less intangible assets including goodwill) to not exceed 0.20x
Total Debt to Secured Liquid Investments (Liquid investments to include unencumbered cash and cash equivalents, FDs, mutual fund investments, listed equity investments held by Issuer other than those in its subsidiaries/affiliates) to be equal to at least 7.0x
The Issuer to have the following equity / equity like investments in New Companies (“New Company Investments”) and shall include the Permitted Security
1. INR 1.25b of investments in New Companies on or before Sep 30, 2022 and thereon
2. INR 1.50b of investments in New Companies on or before Jun 31, 2023 and thereon
3. INR 1.75b of investments in New Companies on or before Mar 31, 2024 and thereon
Maximum further indebtedness to be restricted to INR 500m and only with Subscriber consent (including for Security Providers)
Minimum annual cash inflows of INR 600 m
At least INR 1,000 million of investments to be made in compliance with ESG requirements of the Subscriber between Feb 1, 2022 and Sep 30, 2022

Liquidity Position

Adequate

JCPL’s liquidity buffers primarily depend on its cash inflows (collections from debt book, charter flight income and divestment income) vis. a vis. the cash outflows (disbursements, new investments, debt servicing commitments, operating expenses). The income by way of divestments has been and is expected to remain volatile owing to its nature of business. However, the liquidity is adequately supported by stable collections from its debt book. JCPL has maintained Rs. 24.25 Cr. in form of unencumbered cash and bank balance as on March 31, 2024. Apart from the collections from clients, JCPL is also augmenting its resources through the NCD to support their liquidity.

Outlook:Stable

Other Factors affecting Rating

None

Key Financials - Standalone / Originator

Particulars	Unit	FY24(Actual)	FY23 (Actual)
Total Assets	Rs. Cr.	1905.91	1892.76
Total Income*	Rs. Cr.	62.05	84.78
PAT	Rs. Cr.	6.18	31.14
Net Worth	Rs. Cr.	1670.37	1664.14
Return on Average Assets (RoAA)	(%)	0.33	1.72
Return on Average Net Worth (RoNW)	(%)	0.37	1.89
Debt/Equity	Times	0.11	0.12
Gross NPA	%	3.92	0.93
Net NPA	%	2.17	-

*Total income equals to Net Interest Income plus other income.

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

Not Applicable

Any other information

None

Applicable Criteria

• Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm
• Default Recognition: https://www.acuite.in/view-rating-criteria-52.htm
• Non-Banking Financing Entities: https://www.acuite.in/view-rating-criteria-44.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
17 Jan 2024	Non-Covertible Debentures (NCD)	Long Term	230.00	ACUITE A- \| Stable (Reaffirmed)
17 Jan 2023	Non-Covertible Debentures (NCD)	Long Term	230.00	ACUITE A- \| Stable (Assigned)
23 Dec 2022	Proposed Non Convertible Debentures	Long Term	230.00	ACUITE Provisional A- (Reaffirmed & Withdrawn)
08 Apr 2022	Proposed Non Convertible Debentures	Long Term	230.00	ACUITE Provisional A- \| Stable (Assigned)

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	INE202K07010	Non-Convertible Debentures (NCD)	25 May 2022	Not avl. / Not appl.	25 May 2027	230.00	Simple	ACUITE A- \| Stable \| Reaffirmed

Contacts

Mohit Jain
Senior Vice President - Rating Operations

Ramesh Metri
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.

Note: None of the Directors on the Board of Acuité Ratings & Research Limited are members of any rating committee and therefore do not participate in discussions regarding the rating of any entity.