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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 23.23 | ACUITE BBB+ | Stable | Reaffirmed | - |
| Bank Loan Ratings | 101.77 | - | ACUITE A2 | Reaffirmed |
| Total Outstanding | 125.00 | - | - |
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Rating Rationale |
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Acuité has reaffirmed its long-term rating at ‘ACUITE BBB+’ (read as ACUITE triple B plus) and short-term rating at ‘ACUITE A2’ (read as ACUITE A two) on the Rs.125.00 crore bank facilities of Vaaan Infra Private Limited (VIPL). The outlook is ‘Stable’.
Rationale for Reaffirmation The rating has been reaffirmed on the account of steady improvement in the revenue from operations and net margins from past financial years. The rating gets comfort from healthy financial risk profile and strong liquidity profile of the company. However, the rating is constraint from intensive working capital operations of the company. |
| About the Company |
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Vaaan Infra Private Limited (VIPL) was incorporated in 2011 being promoted by Mr. Arnav Kishore and Mrs. Neetu Kishore. VIPL is a Faridabad based company, which is engaged in the development of infrastructure and highway traffic management solution. The company’s operational segment involves Toll Management system (TMS), Advance Traffic Management System (ATMS) and Smart city solution. Under TMS & ATMS, it provides equipment for toll maintenance such as IT systems to collect tolls, servers, sensors, security cameras, ticket dispenser, weather monitoring etc. Under smart city solutions, the company provides smart parking solutions, city security and surveillance system, system integration and client support centre.
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| Unsupported Rating |
| Not Applicable |
| Analytical Approach |
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The rating team has taken standalone financial and business risk profile of Vaaan Infra Private Limited to arrive at this rating.
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| Key Rating Drivers |
| Strengths |
| Experienced management
VIPL has been promoted by Mr. Arnav Kishore and Mrs. Neetu Kishore. The promoters has over two decades of experience among themselves in the toll management industry and thus, such experience had enabled the company to maintain long standing relationship with customer and supplier for more than a decade. The company has been able to achieve healthy scale of operations, on account of back to back execution of orders. The company is currently being managed by Mrs. Neetu Kishore and qualified management team down the line. The company has outstanding order book of Rs. 187.81 crore as on date from reputed client such as PNC Infratech Limited, Larsen & Turbo Ltd, Gawar Construction Limited etc. Acuite believes that the company would continue to benefit from experience of the Directors and long track record of the company. Financial risk profile The company’s financial risk profile is healthy marked by net worth, low gearing and strong debt protection metrics. Company’s tangible net worth stood at Rs. 75.43 Cr. in FY 23 as against Rs. 57.79 Cr. in FY 22. The company follows conservative leverage policy. Debt to Equity ratio improved by 14 bps and stood at 0.17 times in FY 23 as against 1.31 times in FY 22. The total debt outstanding of the company is Rs. 12.45 Cr. as on 31 March, 2023 which consists of long term bank borrowings (car loans) of Rs. 0.06 crore, short-term working capital limit of Rs. 7.84 crore, current maturities of long term Debt Rs. 0.21 Cr. and Rs. 4.33 Cr. of unsecured loans from directors & other corporates. The debt protection matrix (i.e. DSCR & ISCR) stood at 9.88 & 15.68 times in FY 23 against 7.78 & 12.49 times in FY 22 respectively. |
| Weaknesses |
| Intensive Working capital Operations
The company’s operations are working capital intensive marked by GCA days of 291 in FY 2023 as against 273 days in FY 22. Elongated GCA days is a result of increased debtors. Debtors have increased year on year from Rs. 92.79 Cr. in FY 22 to Rs. 105.45 Cr. in FY 23. Debtor days has increased from 216 days in FY 22 to 239 days in FY 23. Currently, the company has debtors worth Rs. 35.92 Cr. for more than six months as on date. The company realizes receivables with the mile stones of completion of work (for example:10%-Advance, supply of equipment-~30%, Installation-40% and remaining on installation and handover). |
| Rating Sensitivities |
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| Liquidity Position |
| Strong |
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The company has strong liquidity marked by net cash accruals to its maturing debt obligations, current ratio, cash and bank balance. The company generated the net cash accruals of Rs. 18.42 Cr. for FY 23 as against the debt repayment obligations of Rs. 0.32 Cr. The current ratio of the company stood at 1.77 times as on 31 March 2023 as against 1.50 times in the previous year. Cash and Bank Balances of company stood at Rs. 2.84 crore. The liquidity of the company is expected to improve as company is expecting to generate net cash accruals of Rs. 20 – 25 Cr. in next medium term indicating availability of funds for any future endeavours. The average utilization for fund-based limits for last 12 months ended March 2024 is 59.38%.
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| Outlook - Stable |
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Acuité believes that VIPL will maintain a ‘Stable’ outlook and benefit over the medium term from its experienced management. The outlook may be revised to 'Positive' if the company reports higher than expected revenues and profitability margins. Conversely, the outlook may be revised to 'Negative' in case of decline in the revenue from operations & margins of the company putting pressure on liquidity and leverage position.
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| Other Factors affecting Rating |
| None. |
| Particulars | Unit | FY 23 (Actual) | FY 22 (Actual) |
| Operating Income | Rs. Cr. | 162.05 | 156.49 |
| PAT | Rs. Cr. | 17.64 | 14.38 |
| PAT Margin | (%) | 10.88 | 9.19 |
| Total Debt/Tangible Net Worth | Times | 0.17 | 0.31 |
| PBDIT/Interest | Times | 15.68 | 12.49 |
| Status of non-cooperation with previous CRA (if applicable) |
| Not Applicable. |
| Any other information |
| None. |
| Applicable Criteria |
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• Default Recognition :- https://www.acuite.in/view-rating-criteria-52.htm • Service Sector: https://www.acuite.in/view-rating-criteria-50.htm • Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm |
| Note on complexity levels of the rated instrument |
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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
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