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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 21.84 | ACUITE C | Assigned | - |
| Bank Loan Ratings | 200.00 | ACUITE C | Downgraded | - |
| Bank Loan Ratings | 18.16 | ACUITE D | Assigned | - |
| Total Outstanding | 240.00 | - | - |
| Total Withdrawn | 0.00 | - | - |
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Rating Rationale |
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Acuité has downgraded its long-term rating to 'ACUITE C' (read as ACUITE C) from 'ACUITE BB+' (read as ACUITE Double B Plus) for proposed bank facilities of Rs.200 Cr. of MVV And GV Housing LLP (Erstwhile MVV And GV Housing).
Acuite has assigned its long-term rating of 'ACUITE D' (read as ACUITE D) for bank facilities of Rs.18.16 Cr. of MVV And GV Housing LLP (Erstwhile MVV And GV Housing). Acuite has assigned its long-term rating of 'ACUITE C' (read as ACUITE C) for proposed bank facilities of Rs.21.84 Cr. of MVV And GV Housing LLP (Erstwhile MVV And GV Housing). Rationale of Rating Downgrade The downgrade is based on delays reported in servicing of debt obligation in loan account statement of MVV And GV Housing LLP. |
| About the Company |
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MVV And GV Housing LLP (Erstwhile MVV And GV Housing) was a partnership firm established in September 2020 which was converted into a limited liability partnership in the year 2023. The firm is engaged in execution of residential projects. The firm was started by Mr. M.V.V. Satyanarayana and Mr. G Venkateswara Rao. The registered office of the LLP is based in Visakhapatnam.
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| Unsupported Rating |
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Not Applicable
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| Analytical Approach |
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Acuite has considered the standalone business and financial risk profile of MVV and GV Housing LLP to arrive at the rating.
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| Key Rating Drivers |
| Strengths |
| Established track record of operation
MVV group (MVVG) is a Vishakhapatnam based residential developer promoted by Mr. M.V.V. Satyanarayana and Ms. M.N. Jyothi. MVV group started its journey as proprietary concern in 1990s and has more than three decades experience and track record in construction of residential projects in Vizag. MVV group is one of the top three player in Vizag city; group has sold over 1.07 Cr. Sq.fts of saleable area spread over 81 projects in AP and TS. Promotors of the group has extensive experience in real estate industry in Vizag city for almost three decades, which has enabled them in maintain strong relation with its suppliers and good brand image among its customers. |
| Weaknesses |
| Instance of delay in servicing of debt obligation
Instance of delay in servicing of term loan obligation by the company in recent past as observed in its loan account statement and as confirmed by the banker. Project risk and execution risk The ongoing project 'The Grand' has the total saleable area of 33,15,525 Sq fts, out of total saleable area firm's share is 30,73,767 Sq fts with the total project cost of Rs.976.56 Cr. The total project cost is to be funded through promotor's contribution of Rs.63.95 Cr., bank loan of Rs.200 Cr. and balance through collections from customer advances. The promoters are high net worth individuals and group companies being debt averse further mitigate the funding risk. The firm has incurred Rs.236.38 Cr. till February 2025 against which it has already received booking of 564 units and received the customer advances of Rs.172.43 Cr. as on February 2025. The construction of the project started on October 2022. The project is expected to get completed by October 2028. While there are inherent project risks as being in nascent stage of construction, the risk is mitigated to some extent as the group has established track record of completion of projects in timely manner. However, any delay in completion of the project may led to cost and time overruns which will remain a key rating sensitivity going ahead. Acuité believes that timely infusion of funds from promotors, timely funding of bank loan and receipt of customer advances will be a key monitorable. Susceptibility to Real Estate Cyclicality and Regulatory Risks 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 real estate industry are cyclical in nature and directly linked to drop in property prices and interest rate risks, which could affect the operations. Given the high level of financial leverage, the high cost of borrowing prevents the real estate's developers' from significantly reducing prices to boost sales growth. Moreover, the industry is also exposed to certain regulatory risks linked to stamp duty and registration tax directly impacting the demand and thus the operating growth of real estate players. |
| Rating Sensitivities |
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Timely servicing of debt obligations
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| Liquidity Position |
| Stretched |
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Liquidity position of the company is marked stretched due to instance of delay in servicing of term loan obligation by the company in recent past.
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| Outlook |
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Not Applicable
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| Other Factors affecting Rating |
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None
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| Particulars | Unit | FY 24 (Actual) | FY 23 (Actual) |
| Operating Income | Rs. Cr. | 10.31 | 0.00 |
| PAT | Rs. Cr. | 0.58 | 0.00 |
| PAT Margin | (%) | 5.59 | 0.00 |
| Total Debt/Tangible Net Worth | Times | 0.19 | 0.16 |
| PBDIT/Interest | Times | 2.07 | 0.00 |
| Status of non-cooperation with previous CRA (if applicable) |
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Not Applicable
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| Any other information |
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None
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| Applicable Criteria |
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• Default Recognition :- https://www.acuite.in/view-rating-criteria-52.htm • Rating Process and Timeline: https://www.acuite.in/view-rating-criteria-67.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 |
| Note on complexity levels of the rated instrument |
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