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| Product | Quantum (Rs. Cr) (SEBI) | Quantum (Rs. Cr) (Other FSR) | Long Term Rating | Short Term Rating | Regulated By |
| Bank Loan Ratings | 0.00 | 161.00 | ACUITE BBB+ | Stable | Reaffirmed | - | RBI |
| Total Outstanding | 0.00 | 161.00 | - | - | - |
| Total Withdrawn | 0.00 | 0.00 | - | - | - |
| Note:- For activities or ratings of instruments falling under the purview of Financial Sector Regulators other than SEBI, the grievance / dispute redressal mechanisms and investor protection mechanisms provided by SEBI shall not be available. |
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Rating Rationale |
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Acuité has reaffirmed its long-term rating of ‘ACUITE BBB+’ (read as ACUITE Triple B Plus) on the Rs. 161.00 Cr. bank facilities of Musaddilal Projects Private Limited (MPPL). The outlook remains 'Stable'.
Rationale for reaffirmation: The rating reaffirmation considers steady revenue stream under lease arrangement from reputed clients and adequate liquidity position marked by adequate cash accruals against repayment obligations. The rating also considers extensive experience of MPPL's management and established track record of its operations. The rating is, however, constrained by the susceptibility to the lessee’ performance along with occupancy and renewal risk. |
| About the Company |
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Musaddilal Projects Private Limited (MPPL) is the flagship and ultimate holding company of the Scalar Group, incorporated in 2006 by Mr. Pramod Kumar Gupta and his son, Mr. Rohit Gupta. MPPL is the parent entity with multiple SPVs under the group. The company has leased specially constructed warehouse premises in Bangalore and Chennai to Hindustan Unilever Limited (HUL) and UTI Worldwide (India) Private Limited (UTI), respectively.
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| Unsupported Rating |
| Not applicable. |
| Analytical Approach |
| Acuité has considered the standalone business and financial risk profile of MPPL to arrive at this rating. |
| Key Rating Drivers |
| Strengths |
| Experienced management and established track record of operations
MPPL is the flagship and ultimate holding company of the Scalar Group, promoted by Mr. Pramod Kumar Gupta and his family. It is the parent entity with multiple SPVs under the group. The promoters have been engaged in the warehouse construction and leasing business for more than a decade through various entities, namely Musaddilal Properties Private Limited, Musaddilal Holdings Private Limited, Egwood Industries Private Limited, and Bhagwat Chattels Private Limited, among others. The group currently owns warehouse space of approximately 2.7 million sq. ft. across 7 locations all over India and has entered into long-term lease agreements ranging from 9 to 20 years. The group has been associated with reputed clients such as HUL, ITC Limited, and UTI under various SPVs. Apart from the leasing business, the Scalar Group has been in the plywood manufacturing business since 1964 under Egwood Boards and Panels Private Limited. The promoters had diluted the shares by 15 percent by allowing private equity investor PCP to invest around Rs.176.50 Cr. in FY2021 by way of equity and debentures. The company has used the proceeds from the investments into its existing as well as newly formed SPVs for purchasing of land across Pune, Chennai Bengaluru, Hyderabad, Rajasthan and Kolhapur. However, PCP has exited all the investments on account of losses in its core business. Propium was given an exit at Rs.150 Cr. along with waiver of the interest accumulated until the date of exit. The waive off was due to pre-exit. In FY2023 Rs.60 Cr. was repaid and in FY2024 Rs. 51 Cr. was repaid, balance amount was paid in FY2025. The repayment was funded partly by way of top -up/ enhancement in existing debt of SPV's and balance by net cash accruals generated from operational assets. Acuité believes that the company will continue to benefit from the experience of the management over the medium term. Steady revenue stream under lease arrangement from the reputed client MPPL derives its revenues through lease rentals from HUL and UTI via warehouse facilities based in Bangalore and Chennai, respectively. HUL is among India’s largest FMCG companies, with a diverse product portfolio including soaps and detergents, personal care products, and food and beverages. The company has 28 owned factories and many outsourced production facilities across the country. The warehouse has a built-up area of 4.20 lakh sq. ft. The facility is rented at a monthly lease rental. The agreement with HUL was signed in 2009 and lasted until 2019; it was further extended for 10 years up to 2029. MPPL receives payment either in advance or within 15 days from the date of the bill. MPPL’s another client, UTI Worldwide, was founded in 1993. The company’s line of business includes arranging the transportation of freight and cargo. The warehouse has a built-up area of 2.18 lakh sq. ft. The facility is rented at a monthly lease rental with an escalation clause of 15 percent every 3 years from April 2017 to June 2027. MPPL receives payment within 10 days from the date of the bill. The operating income stood at Rs. 20.11 Cr. in FY2025, compared to Rs. 22.41 Cr. in FY2024. Additionally, the company maintains a Debt Service Reserve Account (DSRA) for three-month repayment along with an ESCROW mechanism. The cash inflows are expected to be steady over the medium term, supported by rental hikes under the specified terms and conditions of the lease agreement. Acuité believes that reputed clientele and regular receipt of rentals are expected to keep the revenues and cash flows stable over the medium term. |
| Weaknesses |
| Customer concentration risk in revenue receipts
To serve the LRD loan, the company's revenues are entirely dependent on 2 customers, i.e. HUL and UTI Worldwide. Acuité believes that any unprecedented stretch in receiving rental lease is likely to impact MPPL's debt-servicing ability. However, the risk is partially mitigated by the long-term agreement of 10 years and lock-in period for entire years along with a clause of levying a penal interest of 18 percent on delayed rentals as per the lease agreement. Susceptibility to lessee’s performance along with occupancy and renewal risk MPPL primarily generates cash flows from lease rentals and warehouse maintenance. The company’s ability to meet its repayment obligations will depend on the continued and timely flow of rentals as per the agreed terms. Events such as delays in receipt of rentals, early exits, or renegotiations by lessees due to lower-than-expected business performance may disrupt cash flow streams, thereby affecting MPPL’s debt-servicing ability. Additionally, renewals or leasing at better terms, and any significant renegotiations by lessees, can adversely impact cash flows from the warehouse. |
| Assessment of Adequacy of Credit Enhancement under various scenarios including stress scenarios (applicable for ratings factoring specified support considerations with or without the “CE” suffix) |
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MPPL maintains a Debt Service Reserve Account (DSRA) for three-months repayment along with the ESCROW mechanism.
Stress case Scenario Acuite believes that, given the presence of three months DSRA mechanism MPPL will be able to service its debt on time, even in a stress scenario. |
Rating Sensitivities
| Potential triggers (individual or collective) for an upward rating action: |
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| Potential triggers (individual or collective) for a downward rating action: |
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| Liquidity Position: |
| Adequate |
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MPPL's liquidity remained adequate, the company is estimated to generate net cash accruals of Rs. 4.40 Cr. as against debt obligation of Rs. 3.51 Cr. in FY2026. Further the company is expected to generate net cash accruals in the range of Rs. 6.15 – 7.32 Cr. as against the debt obligation of Rs.3.51- 4.90 Cr. in FY2027-28. The company maintains unencumbered cash and bank balances of Rs.2.39 Cr. as on March 31, 2025. The expected average DSCR stood at ~1.08 times till FY2032 for LRD facility. Further liquidity is supported by ESCROW account wherein the presence of waterfall mechanism provides further comfort for debt repayment. The company maintains DSRA equivalent to three months of debt obligation which stood at Rs. 3.26 Cr. as on March 31st 2026. Acuité believes that the liquidity of the company will remain adequate with steady cash inflows from the reputed customers and presence of ESCROW and DSRA mechanism.
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| Outlook: Stable |
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| Other Factors affecting Rating |
| None. |
| Particulars | Unit | FY 25 (Actual) | FY 24 (Actual) |
| Operating Income | Rs. Cr. | 20.11 | 22.41 |
| PAT | Rs. Cr. | (5.10) | 0.32 |
| PAT Margin | (%) | (25.38) | 1.41 |
| Total Debt/Tangible Net Worth | Times | 11.78 | 10.04 |
| PBDIT/Interest | Times | 0.75 | 1.27 |
| Status of non-cooperation with previous CRA (if applicable) |
| Not applicable |
| Any other information |
| None. |
| Applicable Criteria |
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• 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 • Lease Rental Discounting : https://www.acuite.in/view-rating-criteria-106.htm |
| Note on complexity levels of the rated instrument |
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| Note:- For activities or ratings of instruments falling under the purview of Financial Sector Regulators other than SEBI, the grievance / dispute redressal mechanisms and investor protection mechanisms provided by SEBI shall not be available. |
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Contacts |
List of instruments and names of regulators of the instruments |
