­­Paranjape Spaces and Services Private Limited (PSSPL) is incorporated as a Private Limited on December 04, 2020.The promoters of the company are Amit Paranjape and Rahul Paranjape.The Company is engaged in development of Residential Real Estate Projects. The company is a part of Paranjape Group, which have developed 204 projects with a developed area of 2.32 Cr sqft majorly in Pune. PSSPL is developing a project in Bandra east. It is a redevelopment project comprising of 14 floors. Out of the total 216 flats,81 flats would be given to the existing tenants and the remaining 135 flats are saleable. The construction of the project is expected to start by the December 2022.

­Acuite has considered the standalone business and financial risk profile of Paranjape spaces and service private limited (PSSPL)while arriving at the rating.

­The company follows proper waste disposal and promotion of energy efficient alternatives. The inherent material risk to this industry includes releasing toxic greenhouse gases and delivering a green building structure by utilizing clean technology. The company makes employee health & safety management a priority given the nature of operations. It also takes into consideration factors such as ethical business practices, legal and regulatory compliance hold utmost significance in the construction industry, considering the frequency of litigations.

Timely execution of the project without cost overruns
Financial Closure within specified timelines

­Any sale below Minimum Selling Price (MSP) of the Projects based on carpet area shall be an affirmative item. Any deviation in the approval milestones.
These approvals are to be obtained within the timelines mentioned in the key project assumption section.
Any deviation in the milestones with respect to the completion of Projects within the time committed to the flat buyers for compliance under RERA or within 36 months from first investment date, whichever is earlier

­The company’s liquidity position is stretched as the sales of the project has not yet started and the cashflows will be depending on the bookings done, collections to be received and the investment from ASK real estate fund. Acuité believes that the ability of the firm to achieve good sales of the units will remain a key monitorable for the over the medium term.

­Acuité believes that the outlook on PSSPL’s rated facilities will remain 'stable' over the medium term on account of experience of the promoters in the real estate domain. The outlook may be revised to 'Positive' in case of significant improvement in cash flow and sales traction. Conversely, the outlook may be revised to 'Negative' in case of any undue delay in the completion of project, or less-than-expected customer advances leading to stretch in its liquidity position.
 

­Supplementary disclosures for Provisional Ratings

A. Risks associated with the provisional nature of the credit rating
1. Lack of third party monitoring of compliance in absence of executed trust deed and no finalized terms in absence of final term sheet
2. In case there are material changes in the terms of the transaction after the initial assignment of the provisional rating and post the completion of the issuance (corresponding to the part that has been issued) Acuite will withdraw the existing provisional rating and concurrently, assign a fresh final rating in the same press release, basis the revised terms of the transaction.

B. Rating that would have been assigned in absence of the pending steps/ documentation
The rating would be equated to the standalone rating of the entity: ACUITE B / Stable Acuité Ratings & Research Limited

C. Timeline for conversion to Final Rating for a debt instrument proposed to be issued
The provisional rating shall be converted into a final rating within 90 days from the date of issuance of the proposed debt instrument. Under no circumstance shall the provisional rating continue upon the expiry of 180 days from the date of issuance of the proposed debt 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