Experienced management and established track record of operations
Sonam Spark Infra Limited (SSIL), incorporated in 1997 by Mr. Mithalal Jain and Mr. Bharat Jain, brings decades of expertise to the real estate sector. Mr. Mithalal Jain, with over 20 years of experience, began his journey in 1991 as a sole proprietor, while Mr. Bharat Jain has successfully delivered multiple projects over the past two decades. SSIL has completed around 27 real estate projects in the Bhayandar region, with a cumulative constructed area exceeding 45 lakh sq. ft. Notable recent developments include Project Indraprasth, completed in 2019, and Project Indraneel, which is nearing completion. Acuite believes that the promoters’ extensive experience and SSIL’s strong execution track record will continue to support the company’s ability to deliver large-scale premium projects successfully.

Moderate project execution and offtake risk in Project Indraneel
The total cost of the 'Project Indraneel' is Rs. 215.51 crore (revised from Rs. 189.12 crore), funded through promoters’ contribution of Rs. 8.92 crore, customer advances of Rs. 116.59 crore, and term debt of Rs. 90.00 crore. The cost overrun was due to an increase in construction costs as well as marketing and administrative expenses incurred during the same period. The project is at an advanced stage of completion, with approximately Rs. 212.01 crore i.e., 98 per cent of the cost incurred as of November 2025. Furthermore, around 87 per cent of the area is sold, with Rs. 151.54 crore received as customer advances. The scheduled completion date is March 2027; however, the project is expected to be completed earlier, by April 2026. Thus, the company remains exposed to moderate project execution and offtake risk in Project Indraneel.

Comfortable cash flow position with low reliance on external debt
The company’s projects are generally funded through approximately 60 per cent promoter contribution and customer advances, and around 40 per cent through bank debt. The company has a stable customer base, which facilitates timely customer advances and further reduces debt drawdowns. This trend is evident in past completed projects as well as in the ongoing 'Project Indraneel'. The average debt service coverage ratio (DSCR) is projected at around 1.83 times for Project Indraneel and 4.02 times for Project Opulence over the tenure of the debt.

Moderately high Project Execution and Offtake Risk in Project Opulence
The project execution and offtake risk remains moderate in Project Opulence, as it is in the nascent stage of completion, with around 55 per cent of the total cost incurred as of November 2025. The booking levels for the project remain moderate, with 18 units sold out of a total of 112 units as on 30th November 2025. For Opulence, the company has received customer advances of Rs. 30.56 crore as on 30th November 2025. The company’s ability to achieve its estimated booking levels and complete the project as per RERA timelines will be a key rating monitorable.

High Geographical Concentration Risk
The company also faces high geographical concentration risk, as all its projects are located in the Mira-Bhayandar area of Thane district. Consequently, any adverse developments in this region could negatively impact overall operations and project execution. However, the company is planning to undertake real estate projects in nearby areas to diversify its concentration risk.

Susceptibility to Real Estate Cyclicality and Regulatory Risks
The Indian real estate industry is highly fragmented, with most developers having a city-specific or region-specific presence. Risks associated with the sector are cyclical in nature, such as fluctuations in property prices and interest rate movements, which can impact operations. Sonam Spark Infra Limited faces exposure to volatile prices due to frequent demand-supply mismatches in the industry. The sector is under significant stress owing to large unsold inventory and elevated borrowing costs, primarily driven by high residential property prices and persistent rollover of bank debt, which increases overall finance costs. Given the high financial leverage, elevated borrowing costs limit developers’ ability to substantially reduce prices to boost sales. Furthermore, the industry is subject to regulatory risks, which could adversely affect players like SSIL and constrain operating flexibility.