Press Release January 07, 2025 SUVITA REAL ESTATES PRIVATE LIMITED Rating Upgraded

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Non Convertible Debentures (NCD)	105.00	ACUITE B- | Stable | Upgraded	-
Total Outstanding	105.00	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

Acuité has upgraded the long-term rating to 'ACUITE B-' (read as ACUITE B Minus) from 'ACUITE C' (read as ACUITE C) on Rs. 105.00 Cr. of Non-Convertible Debentures (NCDs) of Suvita Real Estates Private Limited (SREPL). The outlook is 'Stable'. Rationale for rating upgrade The rating upgrade reflects the regularization of the account, as evidenced by the issuer's timely coupon payments on the NCDs till date. However, the rating is constrained by the high interest burden coupled with company's poor liquidity position, as it is entirely dependent on cashflows from its group company to meet future coupon payments and repayment of the NCD at the end of its tenure.

About the Company

Mumbai based, Suvita Real Estates Private Limited is incorporated in 2019 is wholly own subsidiary of Shapoorji Pallonji Real Estate Private Limited (Formerly known as Shapoorji Pallonji Construction Private Limited) which in turn is a subsidiary of Shapoorji Pallonji and Company Private Limited. The current directors of the company are Mr. Rajesh Baxi, Mr. Kanishka Phatak and Mr. Jotish Jha.

Unsupported Rating

­Not Applicable.

Analytical Approach

­Acuité has considered the standalone business and financial risk profile of SREPL to arrive at the rating.

Key Rating Drivers

Strengths

Extensive experience of promoter in real estate business SREPL is a wholly owned subsidiary of Shapoorji Pallonji Real Estate Private Limited (Formerly known as Shapoorji Pallonji Construction Private Limited). The Shapoorji Pallonji group is a well-established and diversified group in India, having operations in various fields such as construction, real estate, infrastructure, water, energy etc, having significant value of land and property holdings. Timely debt servicing As of November 2024, SREPL has been consistent in making timely coupon payments of its existing debt obligations. These payments have been managed through the interest income generated from advances provided to a group company.

Weaknesses

High interest burden The company had successfully refinanced the existing NCD in February 2024. However, the refinancing of the same has happened at a significantly higher coupon rate creating an additional stress on liquidity of the company. Furthermore, according to the terms of the NCD, if SREPL fails to repay the NCD within 12 months from the issuance date, the coupon rate will increase by 300 basis points retrospectively, adding an additional interest burden on the company.   High dependence on group company for servicing near term debt The current NCD has been issued for a shorter period of 15 months, with repayment scheduled for May 2025. At present, the company does not have sufficient cashflows to meet the repayment obligations. According to the management, the repayment of the NCD will be financed through cashflows from the group company and the monetization of land within the group company which is marked as collateral of this rated NCD.

Rating Sensitivities

­Timely servicing of debt obligation.

All Covenants

­Hypothecation of 100% receivables, Development Rights, FSI of the collateral Security, and any other rights and benefits. Minimum Asset Cover of 0x at all times. Minimum Free Cash Flow Cover of 2.0x at all times.

Liquidity Position

Poor

The liquidity of the company is marked poor as it had previously defaulted on its NCD repayment obligations. Further, the company has refinanced the same at a higher coupon payment. Going ahead, the group will be monetizing land to repay the current NCD issued by SREPL.

Outlook: Stable

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Other Factors affecting Rating

­None.

Key Financials

Particulars	Unit	FY 24 (Actual)	FY 23 (Actual)
Operating Income	Rs. Cr.	15.50	15.50
PAT	Rs. Cr.	(11.95)	(4.92)
PAT Margin	(%)	(77.06)	(31.75)
Total Debt/Tangible Net Worth	Times	(5.18)	(9.33)
PBDIT/Interest	Times	0.52	0.72

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 • Rating Process and Timeline: https://www.acuite.in/view-rating-criteria-67.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 21 Feb 2024 Non-Covertible Debentures (NCD) Long Term 95.00 ACUITE C (Assigned) Non-Covertible Debentures (NCD) Long Term 10.00 ACUITE C (Assigned) 08 Jan 2024 Proposed Non Convertible Debentures Long Term 95.00 ACUITE Provisional C (Reaffirmed) Proposed Non Convertible Debentures Long Term 10.00 ACUITE Provisional C (Assigned) 20 Dec 2023 Proposed Non Convertible Debentures Long Term 95.00 ACUITE Provisional C (Assigned)

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Annexure - Details of instruments rated

Lender’s Name ISIN Facilities Date Of Issuance Coupon Rate Maturity Date Quantum (Rs. Cr.) Complexity Level Rating Not Applicable INE0E1F07026 Non-Convertible Debentures (NCD) 12 Feb 2024 17.25 07 May 2025 95.00 Simple ACUITE B- | Stable | Upgraded ( from ACUITE C ) Not Applicable INE0E1F07026 Non-Convertible Debentures (NCD) 12 Feb 2024 17.25 07 May 2025 10.00 Simple ACUITE B- | Stable | Upgraded ( from ACUITE C )

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Contacts

Mohit Jain Senior Vice President - Rating Operations Parth Patel Lead Analyst - Rating Operations	Contact details exclusively for investors and lenders Mob: +91 8591310146 Email ID: analyticalsupport@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. Note: None of the Directors on the Board of Acuité Ratings & Research Limited are members of any rating committee and therefore do not participate in discussions regarding the rating of any entity.