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 its long-term rating to ‘ACUITE BBB’ (read as ACUITE Triple B) from ‘ACUITE BBB-’ (read as ACUITE Triple B minus) on the Rs.770.00 crore bank facilities of Phoenix Infocity Private Limited (PIPL). The outlook is 'Stable'.
Acuite has assigned its long-term rating of ‘ACUITE BBB’ (read as ACUITE Triple B) on the Rs.105.00 crore bank facilities of Phoenix Infocity Private Limited (PIPL). The outlook is 'Stable'.
Rationale for Rating
The rating upgrade factors in the PIPL’s strong parentage, improvement in the occupancy levels from 62 per cent to 76 per cent and adequate cash flow position. Further the rating also factors in the support by Phoenix Group’s financial strength, established track record of refinancing and group support, and a common treasury framework. The rating also gets support from its relationship with the Capitaland group along with its forward sale agreement. However, the rating is constrained by risks associated with timely occupancy of the remaining vacant space and the inherent cyclicality of the real estate sector.
About the Company
Phoenix Infocity Private Limited (PIPL), incorporated in 2003, is a part of Hyderabad based Phoenix group of entities which specializes in the development of IT/ITES Special Economic Zones, retail malls, residential and commercial complexes, automobile dealerships, and educational infrastructure. The company is primarily owned by Phoenix Infratech (India) Private Limited, which holds 58.82 per cent stake, while the remaining 41.18 per cent is held by Apex Urban Infrastructure Private Limited. The company is currently managed by Mr. Gopi Krishna Patibanda and Mr. Jagdeesh Babu Ramanathan. As on date, the company owns Tower ‘H09’ which it has developed at Avance Business Hub at Hitec City, Hyderabad.
Unsupported Rating
Not Applicable
Analytical Approach
Acuité has considered the standalone business and financial risk profiles of the PIPL to arrive at this rating.
Key Rating Drivers
Strengths
Strong promoter group and established track record of operations PIPL, incorporated in 2003 and headquartered in Hyderabad, is jointly promoted by Phoenix Infratech (India) Private Limited (58.82 per cent stake) and Apex Urban Infrastructure Private Limited (41.18 per cent stake). The group has a strong presence across IT/ITES Special Economic Zones, retail malls, residential and commercial developments, automobile dealerships and educational infrastructure. Over the years, the group has developed and delivered around 24 million square feet (msf) of mixed-use space and currently has around 24 msf under various stages of development in Hyderabad, Telangana. Under PIPL, the group has jointly developed the ‘Avance Business Hub’, a 10-tower IT/ITES Special Economic Zone aggregating 4.6 msf. Of the total development, 3.3 msf across six towers was owned by PIPL, while the balance was owned by the landowners. The company has already handed over four towers to the landowners and sold five of its six towers to the Singapore-based CapitaLand Group. The remaining tower, H-09, has been completed and continues to be owned by PIPL. CapitaLand is a leading global real estate investment and development group with a presence across more than 260 cities in over 40 countries. Acuite believes, the company will continue to benefit from its strong parentage, established track record of operations and association with CapitaLand group over the medium term.
Comfortable cashflow position Tower H-09 has a total leasable area of 1.16 million SFT with a vacant space of 0.27 million SFT. The DSCR for tower H-09 is estimated to remain above unity with an average DSCR of ~1.51 times during the tenure of the loan. Further PIPL has ESCROW account maintained with DSRA balance of 3 months of Rs.31.36 crores. Additionally CapitaLand group has signed a forward purchase agreement with Phoenix group to acquire Tower H09, however, the agreement is awaiting completion of certain terms of the contract.
Weaknesses
Moderate Occupancy along with concentrated lessee profile The tower asset H09 has a total leasable area of 11.60 lsf out of which, as on date 8.85 sf is leased out i.e. 76 percent and balance is vacant. The project is completed in FY2022. Further, out of the leased area ~43 percent is occupied by one lessee underlying customer concentration risk. However, presence of lock in period and exit clauses mitigates the concentration risk to an extent.
Exposure to inherent cyclicality in the real-estate industry Being a cyclical industry, the real estate is highly dependent on macro-economic factors which make the company’s sales vulnerable to any downturn in the real-estate demand and competition within the region from various established developers.
ESG Factors Relevant for Rating
PIPL's corporate governance philosophy is built on a legacy of fairness and transparency, aiming to enhance long-term shareholder value while upholding integrity and regulatory compliance. Phoenix Foundation, in collaboration with the Telangana Forest Department, is establishing a 500-acre eco-forest in Moinabad. This project aims to plant a variety of trees to attract wildlife and birds, serve as a carbon sink to reduce pollution, and include walkways for visitors to enjoy the natural environment. Misaal Hyderabad is a unique social welfare initiative that uses community art to enhance mental and physical health among slum dwellers. Through sanitation and cleanliness drives, it raises awareness about social improvement indicators. Key initiatives include art camps, balwadis and learning centres, and women empowerment & skill training camps. These efforts align with ESG criteria by addressing health, education, and gender equality, positively impacting the community and supporting sustainable development.
Rating Sensitivities
Potential triggers (individual or collective) for an upward rating action:
Timely leasing of the vacant space and increase in occupancy levels above 90 per cent.
Accelerated repayment of debt.
Potential triggers (individual or collective) for a downward rating action:
Delay in leasing of available vacant space.
Delay in receipt of rental lease and DSCR falling below 1.10 times.
Liquidity Position
Adequate
The company has an adequate liquidity position marked by an adequate net cash accruals (NCAs) of Rs.24.29 Cr. as against maturing debt obligation of Rs.12.5 crores in FY2026 (Prov.) in LRD facility. Further the NCA’s are expected to be in the range of Rs.25-30 Cr. as against maturing debt obligation in the range of Rs.12-21 Cr. during FY2027-28. Further the liquidity is supported by expected average DSCR of ~1.51 times for the entire tenure of the LRD loan facility. Further the liquidity is supported from the presence of DSRA and ESCROW mechanism. The company maintains DSRA balance equivalent to three months of debt obligation of ~Rs.31.36 crores. Additionally, the company is expected to sell off the tower H-09 by December 2026 for a sale consideration of around Rs.1350 Cr. which will be utilised to repay the outstanding debt, and the surplus will be utilised at group level. PIPL has an unencumbered cash and bank balance of Rs.56.86 crores as on March 31, 2026 (Prov.) which provides additional support to the liquidity profile of the company.
Outlook: Stable
Other Factors affecting Rating
None
Particulars
Unit
FY 26 (Provisional)
FY 25 (Actual)
Operating Income
Rs. Cr.
76.26
83.84
PAT
Rs. Cr.
1.34
2.54
PAT Margin
(%)
1.75
3.03
Total Debt/Tangible Net Worth
Times
7.26
6.58
PBDIT/Interest
Times
1.14
1.00
*
#PBDIT/Interest includes interest capitalised
Status of non-cooperation with previous CRA (if applicable)
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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