Press Release February 18, 2025 MAHAAVIR SUPERSTRUCTURES PRIVATE LIMITED Rating Upgraded

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	70.00	ACUITE BBB | Stable | Upgraded	-
Total Outstanding	70.00	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

­Acuité has upgraded the long-term rating to ‘ACUITE BBB’ (read as ACUITE triple B) from ‘ACUITE BBB-’ (read as ACUITE triple B minus) on the Rs.70.00 Cr bank facilities of Mahaavir Superstructures Private Limited (MSPL). The outlook is ‘Stable’. Rationale for upgrade The rating of MSPL is primarily on account of robust construction and sale progress witnessed by the company in its project ‘Mahaavir Exotique Phase I’ which is on the verge of completion and is expected to be completed by Q1 FY2026, ahead of its projected timeline (December 2027). As on 31st December, 2024, 92% of the inventory has been sold and remaining is expected to be sold in next couple of quarters. Further, under ‘Mahaavir Exotique Phase II’, 52% of the inventory has been sold against 23.82% of the construction being completed as on 31st December, 2024. The project is ongoing and is expected to be completed by December, 2027. In addition, under the project – Aikyam, MSPL will be to charging JDA fees of approximately 34% on the selling inventory on q-o-q basis. The rating also draws comfort from the extensive experience of the promoters in the real estate segment as well as adequate liquidity backed by healthy sales and average collection traction. The rating is however constrained on account of moderate demand and implementation risk in MSPL's ongoing project (Mahaavir Exotique Phase II) and its exposure to the inherent cyclicality in the real estate market. Going forward, the sales collections and timely completion of company’s ongoing project will remain key rating sensitivity factors.

About the Company

­MSPL incorporated in the year 2019, is a Mumbai based residential real estate developer promoted by Mr. Omprakash Chhajer and his son Mr. Mohnish Chhajer. The company is a part of Mahaavir Group established in the year 1988, a premium real estate developer in Navi Mumbai having a past record of completing more than 30 projects amounting to 3.4 million sq. ft. till date. MSPL is currently executing its residential project named ‘Mahaavir Exotique Phase 1” in Kharghar, Navi Mumbai started in September 2021.

Unsupported Rating

­Not Applicable

Analytical Approach

­Acuité has considered the standalone view of the business and financial risk profile of MSPL to arrive at the rating.

Key Rating Drivers

Strengths

­Experienced management and strong brand presence of the group in Navi Mumbai MSPL incorporated in the year 2019, is a part of Mahaavir Group that is engaged in developing residential real estate development projects. The group has an established operational track record of over three decades. MSPL is promoted by Mr. Omprakash Chhajer who possesses more than three decades of varied experience across sectors like Textile Trading, Manufacturing of Edible Oil & Real Estate. He is supported by his son Mr. Mohnish Chhajer into the business. The promoters are being supported by its team of experienced professionals in managing day to day operations of MSPL. The extensive experience of the promoters has enabled MSPL to establish a healthy relationship with the contractors and the material suppliers. Acuité believes that the promoters experience in the construction and real estate industry in Navi Mumbai area is expected to support in timely completion of the project. Advance level of progress of the project The construction of “Mahaavir Exotique Phase I” is on the verge of completion and is expected to be completed by Q1 FY2026, which is ahead of its projected timeline (December 2027). As of December 31st, 2024, MSPL incurred a total cost of Rs.146.55 Cr against the total project cost of Rs. 192.45 Cr. The company has sold area of 4.14 lakh square feet out of 4.48 lakh square feet, which is 92.52% of the total space as of December 31, 2024. MSPL has completed 70% of construction as of December 31, 2024 against which it has been already received bookings of 52.48%. Further, the construction of “Mahaavir Exotique Phase II” started in October 2023 and is expected to be completed by December 2027. As of December 31st, 2024, MSPL incurred a total cost of Rs.30.31 Cr against the total project cost of Rs. 104.87 Cr. The company has sold area of 1.28 lakh square feet out of 2.64 lakh square feet, which is 48.63% of the total space as of December 31, 2024. MSPL has completed 23.82% of construction as of December 31, 2024 against which it has been already received bookings of 17.87%. Acuite notes that going forward the company wolud be able to generate healthy cashflow traction from the unsold inventory which is expected to be sold in near to medium term.

Weaknesses

­Moderate demand and implementation risk Demand risk is associated with the project as local real estate market being fragmented and unorganised thereby increasing competition. In addition, the commanding of better price realisation will remain a key sensitive in near to medium term as the company is depending upon the large customer advances. Further, the project is also exposed to implementation risk as it is expected to be completed by the Q3FY28. Inherent cyclicality in real estate 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 the real estate industry are cyclical in nature of business (drop in property prices) and interest rate risk, among others, which could affect the operations. The real estate sector is under high stress on account of large amounts of unsold inventory and high borrowing costs. This is primarily attributable to the high residential property prices due to persistent rollover of bank debt, which has a cascading effect on the overall finance costs. Given the high degree of financial leverage, the high cost of borrowing inhibits the real estate developer’s ability to significantly reduce prices to augment sales growth.

Rating Sensitivities

­Timely realization of customer advances pending from sold inventory Lower than expected sales traction leading to increased dependence on debt Sharp decline in cash flow by slackened saleability of project or delays in project execution

Liquidity Position

Adequate

The company is expected to generate healthy cash flows against the lower debt repayment, which provides liquidity comfort in near to medium term. The promoters also have good fund infusion ability in case of any exigency. Further, the terms of the sanction also include conditions for ensuring adequate liquidity such as escrow mechanism secured with debt service reserve account equivalent to 3 months interest.

Outlook: Stable

­

Other Factors affecting Rating

­None

Key Financials

Particulars	Unit	FY 24 (Actual)	FY 23 (Actual)
Operating Income	Rs. Cr.	93.74	0.02
PAT	Rs. Cr.	8.17	(0.04)
PAT Margin	(%)	8.71	(208.97)
Total Debt/Tangible Net Worth	Times	2.37	2.38
PBDIT/Interest	Times	454.01	(0.36)

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 • 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

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 22 Nov 2023 Term Loan Long Term 70.00 ACUITE BBB- | Stable (Upgraded from ACUITE BB+ | Stable) 24 Aug 2022 Term Loan Long Term 70.00 ACUITE BB+ | 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 State Bank of India Not avl. / Not appl. Term Loan 29 Mar 2022 Not avl. / Not appl. 31 Dec 2026 70.00 Simple ACUITE BBB | Stable | Upgraded ( from ACUITE BBB- )

­

Contacts

Mohit Jain Senior Vice President - Rating Operations Archita Sharma 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.