Press Release March 18, 2026 MGM KNOWLEDGE AND EDUCATIONAL SOCIETY Rating Assigned

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	62.00	ACUITE BB | Stable | Assigned	-
Total Outstanding	62.00	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

­Acuite has assigned its long-term rating of ‘ACUITE BB' (read as ACUITE double B) on Rs. 62.00 Cr. bank facilities of MGM Knowledge and Educational Society (MGMKES). The outlook is 'Stable'. Rationale for rating: The assigned rating considers the trustees’ extensive experience in education sector and experienced leadership team. The rating also favourably factors in the commencement of school operations and its positioning as a premium school with modern infrastructure and diversified academic offerings. However, the rating is constrained by limited operational track record of the society, modest financial risk profile couple with stretch liquidity position and stringent regulatory framework for the educational sector in India along with competition from the schools in the vicinity.

About the Company

MGM Knowledge and Educational Society (MGMKES) was formed in 2020 and engaged in running a premier international school in Hyderabad namely Manchester Global School (MGS) was established by MGM Knowledge and Educational Society (MGMKES) registered under the Telangana Societies Registration Act 2001 (Telangana, India). The society is chaired by Dr. Kondal Reddy Kandadi, former Deputy Vice Chancellor of Manchester University, UK. The construction of the school campus is completed in 2024 with commercial operations starting from academic year 2025. The school has international infrastructure facilities for education, sports, extracurricular activities and hostel facilities having over 6 lakhs square feet of built-up area, spread over 14 acres.

Unsupported Rating

­Not applicable

Analytical Approach

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

Key Rating Drivers

Strengths

Experienced management and leadership Team Dr. Kondal Reddy Kandadi, PhD, MBE, President of MGMKES, is a distinguished academic leader with over 20 years of successful global experience in the education sector. A former Deputy Vice-Chancellor of the University of Manchester, UK, he is supported by a highly skilled team of principals, teaching professionals, and administrative staff with international expertise, bringing world-class education to Hyderabad. Acuité believes that the trustee’s extensive experience will significantly support the school in establishing a presence in the state of Telangana. Commencement of school operations and its market position as the premium school MGM Knowledge and Educational Society has commenced school operations for the academic year 2024-25  with a strategic intent to position the institution in the premium segment of the education market. The school’s market positioning is supported by experienced leadership, planned infrastructure, and an academic framework aligned with high-quality educational standards. The school’s operations are supported by modern infrastructure and diversified academic offerings, which together enhance its value proposition in the education market. The availability of well-planned classrooms, learning resources, and supporting facilities enables effective academic delivery, while a diversified curriculum framework caters to varied student learning needs and preferences. It is expected to support enrolment traction and improve student retention over time. Acuité believes that over the medium term, these factors are likely to enable the school to strengthen its competitive position within the premium schooling segment in Telangana.

Weaknesses

Limited operational track record The society’s scale of operations remains small since their first year of operations started in FY2025 with modest student enrolment of 200 students and revenue of Rs. 11.45 Cr. in FY2025. Society has reached nearly 400 students in the second academic year (FY2026). The society has reported revenues of Rs. 24.85 Cr. in 11M FY26, reflecting healthy growth. The society’s ability to achieve sustained growth in enrolment reflecting in revenues and profitability, its academic portfolio, and strengthening its institutional presence will remain key monitorable. Modest financial risk profile Society’s financial risk profile is modest, marked by low net worth along with high gearing and weak debt protection metrics. The net worth of the society stood at Rs.18.91 Cr. as on March 31st, 2025, against Rs.16.81 Cr. as on March 31, 2024 respectively. The gearing (debt-to-equity) of the society stood at 3.85 times as on March 31,2025, as against 2.72 times as on March 31, 2024. Total debt includes short term debt of Rs. 13.66 Cr. and long term debt of Rs. 39.08 Cr. as on March 31st ,2025. Society’s debt protection metrics is weak marked by– Interest coverage ratio and debt service coverage ratio stood at (0.51) times and (0.51) times as on March 31, 2025. The subdued coverage indicators are primarily attributable to the nascent stage of operations, with school activities having commenced only in June 2024, resulting in limited operating cash flows during the period. TOL/TNW stood at 3.86 times as on March 31st, 2025, against 2.89 times as on March 31st, 2024. The debt to EBITDA of society stood at (27.61) times in March 2025. Acuité believes that the Society’s financial risk profile is expected to improve over the medium term, supported by the transition into the second year of operations thereby  expected increase in revenues. Stringent regulatory framework for the educational sector in India along with competition from the schools in the vicinity MGMKES is affiliated to International Baccalaureate (IB) and Central Board of Secondary Education and has to adhere to regulation pertaining to student faculty ratio and intake capacity. Any major change in regulatory framework  or change in policy by affiliated boards could have impact on the revenue, financial and operating performance of the trust. In Hyderabad, Manchester International School competes with several prominent international and private schools that cater to families seeking global curricula and strong academic outcomes.

Rating Sensitivities

Potential triggers (individual or collective) for an upward rating action:

Consistent growth in revenues and profitability Improvement in financial risk profile with gearing below 1.5 times and DSCR above 2 times

Potential triggers (individual or collective) for a downward rating action:

Lower than expected revenues and profitability Any large debt funded capex, impacting the financial risk profile with gearing above 4 times Consistent inadequacy of cash accruals, impacting debt serviceability

Liquidity Position

Stretched

­The liquidity of society remains stretched by its negative net cash accruals, which stood at Rs. (7.78) Cr. as on March 31, 2025 as against Nil debt repayment obligations. Looking ahead, net cash accruals are expected to range between Rs. 5.37 Cr. and Rs. 14.73 crore for FY2026–FY2027, while repayment obligations are projected to remain around Rs. 4.70 Cr. to Rs. 7.73 Cr. during the corresponding period. The society unencumbered cash and bank balance stood at Rs. 0.73 Cr. as of March 31, 2025. The current ratio stood at 1.08 times in FY2025. However, the reliance on working capital limits is high at ~ 98 percent utilization of the fund-based limits over the past 8 months ending in January 2026. Acuite believes that the liquidity position of the society  is expected to improve over the medium term, supported by steady improvement in  scale of operations and positive cash accruals.

Outlook: Stable

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Other Factors affecting Rating

­None

Key Financials

Particulars	Unit	FY 25 (Actual)	FY 24 (Actual)
Operating Income	Rs. Cr.	11.45	0.00
PAT	Rs. Cr.	(12.40)	0.00
PAT Margin	(%)	(108.28)	0.00
Total Debt/Tangible Net Worth	Times	3.85	2.72
PBDIT/Interest	Times	(0.51)	0.00

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

­None.

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 • 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 :

­Not applicable

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. 0.58 Simple ACUITE BB | Stable | Assigned Canara Bank Not avl. / Not appl. Secured Overdraft Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 15.00 Simple ACUITE BB | Stable | Assigned Bank Of Baroda Not avl. / Not appl. Term Loan 26 Mar 2025 Not avl. / Not appl. 31 Mar 2031 46.42 Simple ACUITE BB | Stable | Assigned

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Contacts

Mohit Jain Chief Analytical Officer - Rating Operations Moparthi Anuradha Devi Senior 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.