­ULCCS Kasaragod Expressway Private Limited was incorporated on 12 April 2021 with its registered office in Kerala. As on date, the company has 2 directors having active directorship; they are Mr. Remeshan Palery and Ms. Meethale Maniyoth Surendran. The company was incorporated to undertake the NHAI project for Six laning of Thalapady to Chengala section of National Highway under Bharatmala Project on Hybrid Annuity Mode (HAM). The total length of the project is 39 kms.

­Uralungal Labour Contract Cooperative Society Limited (ULCCS), was formed in a rural pocket in Malabar region in North Kerala. ULCCS was formed in 1925 by the disciples of eminent social reformer Sri Guru Vagbhatananda in a village called Uralungal near Vatakara in Kozhikode District of Kerala. The major share holder of the society is  Government of Kerala, which holds 84.7 percent of the issued shares and rest are held by the members of the society. ULCCS undertakes civil construction work in Infrastructure development in Kerala and is one of the most preferred organizations for development of roads, bridges, buildings and allied infrastructure. Major clients of the Society include National Highways Department for Highway projects, Public Works Department of Govt. of Kerala (GoK) for State Road Development, Central Ministries such as Ministry of Panchayat Raj for rural roads under Pradhan Mantri Gram Sadak Yojana (PMGSY), several state government ministries such as Local Self Government, Co-operation, Tourism etc., and a host of reputed private enterprises. ULCCS has grown to be the biggest Labour Contract Society in the State, providing direct employment to more than 13,000 workers all over Kerala.

­Acuité has taken the standalone view of the business and financial risk profile of UKEPL and has factored support from the sponsor of the project i.e. ULCCS to arrive at final rating.

• ­Execution of project without time and cost over runs

• Any changes in credit rating of sponsor or the Government of Kerala.

­T­he company has adequate liquidity profile marked by strong resource mobilization from its sponsor entities. Promoter’s have infused substantial amount of funds to execute the order. The said amount is being adjusted against grant. The repayment of term loan will commence from October 2025 that is ten months from the scheduled commercial operations date (COD) and after the receipt of first annuity, which helps to mitigate any potential liquidity mismatch. Additionally, the parent company has extended its guarantee towards the repayment of the loan. This further strengthens the liquidity position of the company.

­Acuité believes that UKEPL will maintain stable credit profile considering the debt tie up for the project already completed, support from ULCCS and the corporate guarantee from the sponsor. The outlook may be revised to ‘Positive’ in case of significant improvement in credit profile of the sponsor and on time completion of the project. Conversely, the outlook may be revised to ‘Negative’ in case of any deterioration in credit profile of the sponsor or significant delay in achievement of project completion milestones

­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