Product Quantum (Rs. Cr) Long Term Rating Short Term Rating
Non Convertible Debentures (NCD) 450.00 ACUITE BB- | Stable | Assigned -
Non Convertible Debentures (NCD) 450.00 ACUITE BB- | Stable | Reaffirmed -
Total Outstanding 900.00 - -
Total Withdrawn 0.00 - -
 
Rating Rationale

­Acuité has reaffirmed its long-term rating of 'ACUITE BB-' (read as ACUITE Double B Minus) on the Rs.450.00 Cr. Non-Convertible Debentures of Suruchi Properties Private Limited (SPPL). The outlook is 'Stable'.
Further, Acuité has assigned the long-term rating at 'ACUITE BB-' (read as ACUITE Double B Minus) on the Rs.450 Cr. proposed  Non-Convertible Debentures of Suruchi Properties Private Limited . The outlook is 'Stable'.

Rationale for rating
The rating reaffirmation takes into account the continued sales momentum with 34.50%/90.62%/87.70% of area sold in Regalia project (also known as Golfview)/Wintersun Ph-2 project/Trails project respectively till 31st March, 2025. Further, the rating also factors the proposed debt refinancing through issue of NCD’s of Rs.450 Cr. leading to moderate improvement in debt service coverage ratio; driven by reduced interest rates, lower redemption premium and elongated repayment schedules with moratorium of 12 months from disbursement. Also, Acuité understands that the proposed refinanced debt shall be secured against the cashflows of only two projects namely i.e Regalia & Wintersun Ph-2, thereby excluding Trails project from the pool of security.

However, the rating remains constrained on account of high implementation risk with 88.78% & 85.48% of cost yet to be incurred for Regalia and Wintersun Ph-2 project respectively and significant dependence on cash collections for incurring balance cost. The rating also factors low collections to the extent of 18.09% in Regalia and 46.59% in Wintersun Ph-2, timely receivable of which is a key rating monitorable. Moreover, the rating remains strengthened by experience and established track record of Century group in Bangalore’s real estate market and ownership of land parcels at multiple locations. though remains constrained with a historical track record of debt servicing issues.

About the Company
Incorporated in 2003, Suruchi Properties Private Limited is a real estate company, part of the Century Group, based in Bengaluru. The company is engaged in execution of residential and commercial projects and managed by Mr. Ashwin Pai and Mr. Ravindra Pai. Currently, SPPL is engaged in development of residential project namely Regalia (interchangeably known as Golfview/Build Rare) located at Indiranagar, Bangalore with total saleable area of 8,95,180 Sq. ft. Further, other projects under group includes a residential project called Trails at Bidalur with total saleable area of 5,81,760 Sq. ft. under a group company named as Century Prime Properties Private Limited and a third project named Wintersun plots and villas with total saleable area of 1,83,300 Sq. ft. under a group firm, Century Northside.
 
About the Group
­Established in 1973, Century Real Estate Holdings Private Limited is a leading professional real estate builder and developer based in Bengaluru. The company has over 3,000 acres of land bank and over 20 million sq. ft. of quality residential and commercial assets under construction. Century group has various ongoing projects across Bengaluru offering residential options, from plots and villas to apartments.
 
Unsupported Rating
­Not Applicable.
 
Analytical Approach

Extent of Consolidation
•Full Consolidation
Rationale for Consolidation or Parent / Group / Govt. Support
Currently, ­Acuité has consolidated the cashflows of Suruchi Properties Private Limited and its group companies namely, Century Prime Properties Private Limited and Century Northside. However, post refinancing ­Acuité shall consolidate the cashflows of Suruchi Properties Private Limited and Century Northside. The consolidation is in view of the operational and financial linkages along with cashflow fungibility among the projects and common management.
Key Rating Drivers

Strengths
­Established track record of operations
Suruchi Properties Private Limited (SPPL) is a part of the Century group and a wholly owned subsidiary of Century Joint Developments Private Limited (ACUITE C) which in turn is a wholly owned subsidiary of Century Real Estate Holdings Private Limited. With over five decades of leadership experience in the real estate industry, Century group is known for its land bank of over 3,000 acres and is trusted by many homeowners in the city of Bengaluru.

Continued sales momentum
The group has recorded a healthy momentum of sales with nearly 34.50%/ 90.62%/ 87.70% of units sold for Regalia/Wintersun Ph-2/Trails respectively till 31st March, 2025 (19.65%/ 74.39%/ 80.93% sold till 30th November, 2024). This has resulted in a total sale of Rs.733.09 Cr./Rs.136.24 Cr./Rs.272.34 Cr. for the Regalia/Wintersun Ph-2/Trails respectively. However, the collections remain low with 18.09%/ 46.59%/ 70.57% of proceeds received for Regalia/Wintersun Ph-2/Trails respectively.

Weaknesses
­Project execution risk
SPPL is prone to the project execution risk as against a total project cost of Rs.739.37 Cr. of Regalia project only 11.22% has been incurred till date. Also, for the Wintersun Ph-2 project against a total project cost of Rs.87.00 Cr, only 14.52% has been incurred till date. Therefore, a significant portion of the cost has to be incurred over the next 3-4 yrs which poses implementation risks. Also, majority of the balance cost and debt servicing is expected to met through the customer advances, therefore, timely collection of receivables is a key rating sensitivity.

Susceptibility to real estate cyclicality, regulatory risks and intense competition in the industry
The real estate industry in India is highly fragmented with most of the real estate developers, having a city specific or region-specific presence. The risks associated with real estate industry are cyclical in nature and directly linked to drop in property prices and interest rate risks, which could affect the operations. Given the high level of financial leverage, the high cost of borrowing prevents the real estate's developers' from significantly reducing prices to boost sales growth. Moreover, the industry is also exposed to certain regulatory risks linked to stamp duty and registration tax directly impacting the demand and thus the operating growth of real estate players. Furthermore, the group continues to remain exposed to intense competition from larger players in Karnataka like Salapuria Sattva group, Shobha group, Prestige group, Purvankara group, Brigade group, etc.
Rating Sensitivities
  • ­Timely servicing of debt obligations.
  • Timely project completion/execution without any significant cost runs
  • Continued improvement in sale of units and realisation of its customer advances.
 
All Covenants
­1.    No further debt in any form can be raised by the obligors without investor consent.
2.    No sale below the floor price set out in business plan for any project asset without consent of investor. In case of sale below floor price, issuer to bring the differential amount from own sources.
3.    Security cover of 2.50x at all times.
4.    No transactions with promotor or related parties except as explicitly disclosed or agreed.
5.    All cash flows to be routed through escrow account. Monitoring of all construction expenses through an escrow mechanism.
6.    Promotors not to divest any stake in the obligors till investor debt is fully repaid.
 
Liquidity Position
Adequate
SPPL’s liquidity is adequate marked by collections of customer advances from the projects in order to repay its debt obligations. The company has also prepaid its redemption premium of Rs.30 Cr. as on 31st March, 2025. Further, the proposed refinancing of debt is expected to moderately improve the average DSCR levels, keeping it in the range of 2.50-3.00 times over the tenure of debt.
 
Outlook: Stable
­
 
Other Factors affecting Rating
­None.
 

Particulars Unit FY 24 (Actual) FY 23 (Actual)
Operating Income Rs. Cr. 8.33 3.98
PAT Rs. Cr. 3.44 (1.89)
PAT Margin (%) 41.30 (47.60)
Total Debt/Tangible Net Worth Times 17.39 0.77
PBDIT/Interest Times 31.61 (6.13)
Status of non-cooperation with previous CRA (if applicable)
­Not Applicable.
 
Interaction with Audit Committee anytime in the last 12 months (applicable for rated-listed / proposed to be listed debt securities being reviewed by Acuite)
Although Acuite requested an interaction with the Audit Committee the issuer entity was unable to arrange it.
Any Other Information
­None.
 
Applicable Criteria
• Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm
• Consolidation Of Companies: https://www.acuite.in/view-rating-criteria-60.htm
• Default Recognition: https://www.acuite.in/view-rating-criteria-52.htm
• Real Estate Entities: https://www.acuite.in/view-rating-criteria-63.htm

Note on complexity levels of the rated instrument

Date Name of Instruments/Facilities Term Amount (Rs. Cr) Rating/Outlook
10 Jan 2025 Non-Covertible Debentures (NCD) Long Term 450.00 ACUITE BB- | Stable (Upgraded from ACUITE B | Stable)
12 Jan 2024 Proposed Non Convertible Debentures Long Term 450.00 ACUITE B | Stable (Assigned)
­

Lender’s Name ISIN Facilities Date Of Issuance Coupon Rate Maturity Date Quantum
(Rs. Cr.)
Complexity Level Rating
Not Applicable INE217T07019 Non-Convertible Debentures (NCD) 22 Mar 2024 12.00 21 Mar 2028 450.00 Simple ACUITE BB- | Stable | Reaffirmed
Not Applicable Not avl. / Not appl. Proposed Non Convertible Debentures Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 450.00 Simple ACUITE BB- | Stable | Assigned
*Annexure 2 - List of Entities (applicable for Consolidation or Parent / Group / Govt. Support)
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Sr No Company Name
1 Suruchi Properties Private Limited
2 Century Prime Properties Private Limited
3 Century Northside
 

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