Press Release

Press Release

April 04, 2024

SHREE RSH PROJECTS PRIVATE LIMITED
Rating Downgraded

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	60.00	ACUITE C \| Downgraded	-
Total Outstanding	60.00	-	-

Rating Rationale

Acuité has downgraded its long-term rating to 'ACUITE C' (read as ACUITE C) from ‘ACUITE BB’ (read as ACUITE double B) on the Rs. 60.00 Cr. bank facilities of Shree RSH Projects Private Limited (SRSHPPL).

Rationale for the downgrade
The team has received the NDS on 03-04-2024 for the last 03 months in which the management has mentioned that there were ongoing delays in the repayment and on the management discussion the client also accepted that due to liquidity crunch the company was not able to pay its interest to its one of lender

About the Company

Incorporated in 2010, Shree RSH Projects Private Limited (SRSHPPL) is engaged in carrying out the business of development and construction of residential and commercial projects. Currently, the company is headed by Mr. Hari Prasad Sharma, Mr. Hitesh Dani and Mr. Harshvardhan Sharma. SRSHPPL has recently constructed a premium residential real estate projects “RSH Signature”. Presently, the company has started construction of two commercial real estate projects “CREST Newtown” and “CORNER 47” in two of the prime locations in Kolkata.

Unsupported Rating

Not Applicable

Analytical Approach

Acuité has taken a standalone view of the business and financial risk profile of SRSHPPL to arrive at the rating.

Key Rating Drivers

Strengths

Experienced management and long operational track record
The company has a long operational track record in the real estate industry for more than a decade. In addition to this, the promoter Mr. Hari Prasad Sharma is highly experienced and involved in the operations of the company. Acuité believes that the long operational track record of the company and promoter’s extensive understanding and expertise will support the company’s growth plans going forward.

Weaknesses

Delays in servicing term debt obligations
Due to the liquidity constraints leading to mis-matches in the cash flows of the Company, , there has been delays in servicing debt repayments in a timely manner by SRSHPPL.

Below average financial risk profile
The company’s below average financial risk profile is marked by modest networth, high gearing and weak debt protection metrics. The tangible net worth of the group decreased to Rs.12.97 Cr as on March 31, 2022 from Rs.16.04 Cr as on March 31, 2021 on account of losses incurred in FY2022. Gearing of the company stood high at 5.56 times as on March 31, 20222 as against 4.26 times as on March 31, 2021. Acuite has also considered unsecured loan of Rs.2.10 crore as quasi equity, as the same amount is subordinated with bank debt. The weak debt protection metrics of the company is marked by negative Debt Service Coverage Ratio as well as Interest Coverage Ratio(ICR) on March 31, 2022. Acuité believes of the company that financial risk profile is expected to be improving over the medium term.

Rating Sensitivities

Timely servicing of term debt obligations??????

Liquidity Position

Stretched

The liquidity position of the company is stretched marked by NDS defaulter which states that the company has ongoing liquidity crunch

Outlook: Not Applicable

Other Factors affecting Rating

None

Key Financials

Particulars	Unit	FY 22 (Actual)	FY 21 (Actual)
Operating Income	Rs. Cr.	12.67	10.27
PAT	Rs. Cr.	(3.07)	(0.17)
PAT Margin	(%)	(24.23)	(1.64)
Total Debt/Tangible Net Worth	Times	5.56	4.26
PBDIT/Interest	Times	(29.27)	43.05

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
• 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

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
10 Jul 2023	Term Loan	Long Term	60.00	ACUITE BB \| Stable (Downgraded from ACUITE BB+ \| Not Applicable)
06 Dec 2022	Proposed Long Term Bank Facility	Long Term	60.00	ACUITE BB+ \| Not Applicable (Reaffirmed & Issuer not co-operating*)
09 Sep 2021	Proposed Long Term Bank Facility	Long Term	60.00	ACUITE BB+ \| Stable (Assigned)

Annexure - Details of instruments rated

Lender’s Name	ISIN	Facilities	Date Of Issuance	Coupon Rate	Maturity Date	Quantum (Rs. Cr.)	Complexity Level	Rating
Punjab National Bank	Not avl. / Not appl.	Term Loan	Not avl. / Not appl.	Not avl. / Not appl.	15 Jul 2027	60.00	Simple	ACUITE C \| Downgraded ( from ACUITE BB )

Contacts

Analytical Details	Contact Details
Mohit Jain Senior Vice President - Rating Operations Tel: 022–49294017 mohit.jain@acuite.in Abhishek Singh Analyst - Rating Operations Tel: 022-49294065 abhishek.s@acuite.in	Contact details exclusively for investors and lenders Mob: +91 8591310146 Email ID: analyticalsupport@acuite.in Tel: 022-49294011 rating.desk@acuite.in

About Acuité Ratings & Research

Acuité is a full-service Credit Rating Agency registered with the Securities & Exchange Board of India (SEBI). The company received RBI Accreditation as an External Credit Assessment Institution (ECAI) for Bank Loan Ratings under BASEL-II norms in the year 2012. Acuité has assigned ratings to various securities, debt instruments and bank facilities of entities spread across the country and across a wide cross section of industries. It has its Registered and Head Office in Kanjurmarg, Mumbai.

Disclaimer: An Acuité rating does not constitute an audit of the rated entity and should not be treated as a recommendation or opinion that is intended to substitute for a financial adviser's or investor's independent assessment of whether to buy, sell or hold any security. Ratings assigned by Acuité are based on the data and information provided by the issuer and obtained from other reliable sources. Although reasonable care has been taken to ensure that the data and information is true, Acuité, in particular, makes no representation or warranty, expressed or implied with respect to the adequacy, accuracy or completeness of the information relied upon. Acuité is not responsible for any errors or omissions and especially states that it has no financial liability whatsoever for any direct, indirect or consequential loss of any kind, arising from the use of its ratings. Ratings assigned by Acuité are subject to a process of surveillance which may lead to a revision in ratings as and when the circumstances so warrant. Please visit our website (www.acuite.in) for the latest information on any instrument rated by Acuité. Please visit https://www.acuite.in/faqs.htm to refer FAQs on Credit Rating.