Press Release August 31, 2026 PALMA GUMLA HIGHWAY PRIVATE LIMITED Rating Upgraded

Product	Quantum (Rs. Cr) (SEBI)	Quantum (Rs. Cr) (Other FSR)	Long Term Rating	Short Term Rating	Regulated By
Bank Loan Ratings	0.00	325.71	ACUITE A+ | Stable | Upgraded	-	RBI
Total Outstanding	0.00	325.71	-	-	-
Total Withdrawn	0.00	0.00	-	-	-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.

Rating Rationale

A­cuité has upgraded the long-term rating to 'ACUITE A+' (read as ACUITE A plus) from 'ACUITE BBB+' (read as ACUITE triple B plus) on the Rs. 325.71 Cr. bank facilities of Palma Gumla Highway Private Limited (PGHPL). The outlook is ‘Stable'. Rationale for upgrade The rating upgradation and migration of PGHPL from ‘Issuer Not Co-operative (INC)' status factors comfortable debt coverage metrics, achievement of the provisional commercial operation date (PCOD) and operational nature of the project with a track record of receipt of the first two semi-annual annuities with some deductions in the first annuity. Acuite notes that PGHPL has received provisional completion certificate by independent engineer on May 10,2025 wherein 99.98 percent of project work is completed and accessible for traffic. Further, rating takes notes that there were procedural delays and consequently the receipt of the first annuity got delayed by 38 days.  However, repayment obligations have been met in timely manner, aided by support from the company’s sponsor RKD Construction Private Limited. The second annuity was received within 12 days from the due date. Moreover, creation of one semi-annual instalment plus interest of two quarters debt service reserve (DSRA) provides additional comfort for repayment of debt obligations. PGHPL’s projected debt coverage indicators are likely to be comfortable with an average debt servicing coverage ratio (DSCR) of 1.64 times till the debt tenure. The rating factors comfort from the reputed track record of RKD in road EPC with a corporate guarantee and undertaking to extend financial support to PGHPL in the event of any cost overruns, shortfall in operations and maintenance expenses, major/periodic maintenance expenditure, creation of the debt service reserve account (DSRA), or debt servicing obligations. The rating draws strength from the Hybrid Annuity Model nature of the project, with 60% of the final completion cost to be paid out as semi-annual annuities (along with the interest on the residual annuities payable, at the Bank Rate + 3%). Further, PGHPL will receive inflation-adjusted operations and maintenance (O&M) cost over the 15-year operations period from the project owner, National Highways Authority of India [NHAI], which is a strong counterparty. These strengths are however partly offset by susceptibility to risks related to delay in receipt of annuity and changes in operational cost & interest rate. Further the availability of a limited buffer of ~14 days between the scheduled annuity receipt date and scheduled principal repayment date, may impact timely debt servicing in case of any delay in receipt of annuity.

About the Company

PGHPL was incorporated in September 2020 by R K D Construction Private Limited (99.9% stake) and Bharat Road Network Limited (0.1% stake). PGHPL is a special purpose vehicle incorporated to undertake 4 laning of Palma Gulma section of NH 23 in the state of Jharkhand on Hybrid Annuity Model (HAM). The project covers a length of 63.17 km. The project was awarded by National Highway Authority of India (NHAI) for a concession period of 17-years, including a construction period of 2 years from the appointed date April 01,2022. However, the company has been granted an extension for a total of 349 days. PCOD achieved on 10th May 2025 (provisional certificate issued by IE vide letter June 26 ,2025 for 61.260 Km. The project’s EPC contractor is RKD and currently managed by Mr Rohan Das (managing director of RKD)

Unsupported Rating

­Not applicable

Analytical Approach

Acuite has considered the standalone business and financial risk profile of PGHPL.

Key Rating Drivers

Strengths

­Established track record of sponsor Based in Orissa, RKD Construction Private Limited, started as a proprietorship firm in 1980 by Lt. Rohit Kumar Das and was changed to a closely held company in 1996. The company is engaged in civil construction activities for road and national highway projects. RKD has executed large number of road projects issued by NHAI, North and State government agencies in EPC mode. Currently it has an outstanding order book of ~ Rs. 3,000 Cr. RKD has formed several joint ventures with leading contractors to execute complex road projects in Odisha. Also, RKD has provided corporate guarantee for the term loan availed by PGHPL from bank. Explicit waterfall mechanism through escrow account coupled with creation of DSRA As per the sanction term, the SPV is required to create debt service reserve account (DSRA) equivalent to one semi-annual instalment for the loan period plus interest for minimum two quarters. DSRA amounting to Rs 20.04 Cr is created as on date. The DSRA requirement will be recalibrated in line with future debt repayment obligations. In the event of delay in receiving any annuities, the instalment plus interest shall be recovered out of DSRA to ensure regular repayment as DSRA shall be replenished by collection in subsequent months. Any shortfall in the DSRA shall be made good from the amount lying in the escrow account after satisfying waterfall mechanism as per the concession agreement.PGHPL shall maintain escrow account for cashflow management. Its receipts from the NHAI through an escrow account with a well-defined cash flow. NHAI deposits all annuities, O&M receipt and other income into the escrow account and withdrawals shall be permitted after embarking the amount required for servicing of debt and as per terms of agreement. Acuité believes that presence of such well-defined waterfall mechanism through escrow to ensure prioritizing of withdrawals and prompt debt repayments. Strong counter party and annuity nature of project limiting revenue risk The project has been issued and awarded by the NHAI, a central government agency that holds strategic importance for the Government of India. It is being developed under an annuity-based revenue model, wherein PGHPL bears no traffic risk and recovers the entire capital cost through biannual annuity payments over a 15-year concession period. Under this model, PGHPL has received 40 percent of the project cost as construction grants, while the remaining 60 percent will be paid in 30 semi-annual annuity instalments, which has commenced from December 2025, and adjusted for the Price Index Multiple. In addition to annuity payments, NHAI will reimburse interest on the reducing balance of the completion cost (net of grants) at a rate equivalent to the bank rate plus 3.00 percent spread. NHAI will also reimburse the operations and maintenance (O&M) cost. PGHPL will be responsible for operations and maintenance during the concession phase, with financial support from NHAI. The annuity model includes price index adjustments to mitigate inflation-related risks and partially offset price fluctuation risks.The company has already received five milestone payments, two annuity receipts but with the delays of 38 days and 12 days respectively from schedule date on account of procedural delays. Acuite takes note that the two annuities received have been calibrated basis adjusted balance project cost Rs 651.83 Cr, Cr which is expected to be revised to Rs 843.54 Cr from third annuity which remains a key rating monitorable.

Weaknesses

S­usceptibility to risks related to delay in receipt of annuity or exposure to risk related to O&M and interest rate fluctuations As per the concession agreement, the company is entitled to receive a semi-annual annuity over the concession period. However, any delay in the timely receipt of these annuity payments could adversely affect its debt servicing capacity. Further the availability of a limited buffer of ~14 days between the scheduled annuity receipt date and scheduled principal repayment date, may impact timely debt servicing in case of any delay in receipt of annuity. In addition to fixed annuities, the project is also eligible to receive interest on outstanding annuity amounts, calculated at the prevailing bank rate plus an applicable spread. Therefore, the project’s cash flows and returns are exposed to the interest rate risk and are dependent on the spread between the RBI’s Bank Rate and the interest rate charged by lenders. Furthermore, the company is also exposed to risks associated with the maintenance of the project and failure to adhere to prescribed maintenance standards or delays in timely upkeep could lead to deductions in annuity payments, thereby significantly impacting the company’s cash flows.

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)

­PGHPL maintains a debt service reserve account (DSRA) equivalent to one semi-annual instalment plus interest of minimum two quarters along with escrow mechanism. Stress case Scenario Acuité believes that, given the presence of DSRA and waterfall payment in escrow mechanism, PGHPL 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:

­ Timely receipt of annuities Improvement in financial risk profile thereby improving its coverage indicators leading to average DSCR above 1.80 times

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

­ Susceptibility to risk related to delay or major deductions in receipt of annuity or any additional debt availed by the SPV thereby impacting its coverage indicators leading to average DSCR falling below 1.3 times. Significant delays in annuity receipts or change in support stance of sponsor impacting the liquidity

Liquidity Position

Adequate

PGHPL’s liquidity position is adequate, supported by timely receipt of milestone payments from NHAI during the project execution phase and commencement of annuities inflow from December  2025 onwards with receipt of two NHAI payments amounting to ~Rs 86.04 Cr till Aug-2026 and further expected to remain adequate supported by timely receipt of proposed annuities (along with interest and O&M payment) amounting to ~Rs 58.91 Cr in balance of FY27 against due repayment obligations of ~Rs 38.08 Cr. Moreover, the project’s DSCR is expected to remain at 1.64 times over the debt tenure. Furthermore, the company has created a DSRA equivalent to one semi-annual debt repayment instalment along with interest for a minimum of two quarters debt obligations. An undertaking from RKD for financial support in case of cost overrun and for cashflow mismatch during the construction and operational phases provides additional comfort. The company had a cash and bank balance of Rs 0.05 Cr as on March 31, 2026 (Prov.)

Outlook-Stable

­

Other Factors affecting Rating

­None

Key Financials

Particulars	Unit	FY 26 (Provisional)	FY 25 (Actual)
Operating Income	Rs. Cr.	66.19	27.98
PAT	Rs. Cr.	(15.23)	(1.11)
PAT Margin	(%)	(23.00)	(3.98)
Total Debt/Tangible Net Worth	Times	3.01	2.58
PBDIT/Interest	Times	0.50	(1011.64)

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 15 May 2026 Term Loan Long Term 323.71 ACUITE BBB+ (Downgraded & Issuer not co-operating* from ACUITE A- | Stable) Proposed Long Term Bank Facility Long Term 2.00 ACUITE BBB+ (Downgraded & Issuer not co-operating* from ACUITE A- | Stable) 24 Feb 2025 Proposed Long Term Bank Facility Long Term 2.00 ACUITE A- | Stable (Reaffirmed) Term Loan Long Term 323.71 ACUITE A- | Stable (Reaffirmed) 27 Nov 2023 Proposed Long Term Bank Facility Long Term 2.00 ACUITE A- | Stable (Reaffirmed) Term Loan Long Term 323.71 ACUITE A- | Stable (Reaffirmed)

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Contacts

Mohit Jain Chief Analytical Officer - Rating Operations Divya Bagmar Analyst - Rating Operations	Contact details exclusively for investors and lenders Mob: +91 8591310146 Email ID: analyticalsupport@acuite.in

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