Press Release May 27, 2025 VSOFT TECHNOLOGIES PRIVATE LIMITED Rating Downgraded

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	46.90	ACUITE C | Downgraded	-
Bank Loan Ratings	22.10	-	ACUITE A4 | Downgraded
Total Outstanding	69.00	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

­Acuité has downgraded the long-term rating to ‘ACUITE C’ (read as ACUITE C) from ‘ACUITE BB+’ (read as ACUITE double B plus) and the short-term rating to 'ACUITE A4' (read as ACUITE A four) from 'ACUITE A4+' (read as ACUITE A four plus) on the Rs. 69.00 Cr. bank facilities of Vsoft Technologies Private Limited (VTPL). Rationale for downgrade The rating downgrade is based on recent delays reported in servicing of debt obligation as per the credit bureau information report (CRIF) of Vsoft Technologies Private Limited (VTPL).

About the Company

­Incorporated in 2004, Vsoft Technologies Private Limited (VTPL) is a Hyderabad (Telangana) based company, promoted by Mr. Murthy Veeraghanta. VTPL is engaged in providing Information technology (IT) and Information technology enabled services (ITes) primarily to banking, financial services and insurance sector (BFSI). It offers wide range of technology products and services along with platform based BPO services which cover payment systems and core banking solutions.

Unsupported Rating

­Not applicable

Analytical Approach

­Acuité has considered the standalone view of the business and financial risk profile of Vsoft Technologies private Limited (VTPL) to arrive at the rating.

Key Rating Drivers

Strengths

­Extensive experience of the management team, strong vintage client base VTPL, incorporated in 2004, provides information technology-based products and solutions to the BFSI segment. The promoter - Mr Murthy Veerghanta has an experience of over 2 decades in the core banking IT solutions business and Software Development and Services. The long track record of operations and experience of the management supported by experienced management team has helped the company develop healthy relationships with its key customers. VTPL offers relatively complex services supported by its expertise, execution capabilities and long-standing relationships with its clients helped in strengthens its value proposition, it also helps in generating higher margins. VTPL has strong counterparties in Government, private, public sector majorly banks. VTPL offers services though software delivery and revenue models – License sale/Usage/outsourcing model (used mostly for Core banking solutions) being a recurring revenue model.

Weaknesses

­Delays in serving debt obligations There have been delays reported in servicing debt obligation as per the credit bureau information report (CRIF) of VTPL. The Working Capital Demand Loan (WCDL) account (sanctioned on June 06,2024) has been classified as Special Mention Account (SMA) for the months of March 2025 to May 2025. Further, there have been delays of ~ 11 days reported in car loans. Vulnerability of profitability to competitive pressures The intense competition in the IT industry, especially the global landscape with larger peers and uncertainty on account of the evolving visa and immigration legislations in key developed markets are challenges that the industry faces. Like other companies in the industry, VTPL also faces challenges with respect to employee attrition rates. With rapid evolution of the Indian IT-enabled services sector, competition is intensifying as more companies vie for a share of the outsourcing pie. VTPL has to compete with multiple players in most of the verticals within the IT services business. Further, the IT industry is susceptible to risks related to technological changes, competition from substitutes and shifts in customer’s preferences. This necessitates continued investments in technology upgradation.

Rating Sensitivities

Timely servicing of debt obligations

Liquidity Position

Stretched

­The liquidity position of the company is marked stretched due to instance of delay in servicing loan obligation from March 2025 to May 2025.

Outlook-Not Applicable

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Other Factors affecting Rating

­None

Key Financials

Particulars	Unit	FY 24 (Actual)	FY 23 (Actual)
Operating Income	Rs. Cr.	70.94	72.49
PAT	Rs. Cr.	0.12	2.45
PAT Margin	(%)	0.17	3.38
Total Debt/Tangible Net Worth	Times	0.24	0.23
PBDIT/Interest	Times	2.16	2.92

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)

Not applicable

Any other information

­None

Applicable Criteria

• 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

­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 05 Apr 2024 Bank Guarantee (BLR) Short Term 12.00 ACUITE A4+ (Reaffirmed) Proposed Bank Guarantee Short Term 0.03 ACUITE A4+ (Reaffirmed) Bank Guarantee (BLR) Short Term 0.07 ACUITE A4+ (Reaffirmed) Bank Guarantee (BLR) Short Term 5.00 ACUITE A4+ (Reaffirmed) Bank Guarantee (BLR) Short Term 5.00 ACUITE A4+ (Reaffirmed) Working Capital Demand Loan (WCDL) Long Term 2.85 ACUITE BB+ | Stable (Reaffirmed) Covid Emergency Line. Long Term 1.22 ACUITE BB+ | Stable (Reaffirmed) Working Capital Term Loan Long Term 1.00 ACUITE BB+ | Stable (Reaffirmed) Working Capital Term Loan Long Term 14.00 ACUITE BB+ | Stable (Assigned) Proposed Cash Credit Long Term 0.41 ACUITE BB+ | Stable (Reaffirmed) Cash Credit Long Term 24.00 ACUITE BB+ | Stable (Reaffirmed) Foreign Currency Term Loan Long Term 3.42 ACUITE BB+ | Stable (Reaffirmed) 17 Jul 2023 Bank Guarantee (BLR) Short Term 12.00 ACUITE A4+ (Reaffirmed & Issuer not co-operating*) Proposed Bank Guarantee Short Term 10.10 ACUITE A4+ (Reaffirmed & Issuer not co-operating*) Foreign Currency Term Loan Long Term 12.00 ACUITE BB+ (Reaffirmed & Issuer not co-operating*) Proposed Cash Credit Long Term 5.00 ACUITE BB+ (Reaffirmed & Issuer not co-operating*) Cash Credit Long Term 8.00 ACUITE BB+ (Reaffirmed & Issuer not co-operating*) Working Capital Demand Loan (WCDL) Long Term 3.00 ACUITE BB+ (Reaffirmed & Issuer not co-operating*) Covid Emergency Line. Long Term 4.90 ACUITE BB+ (Reaffirmed & Issuer not co-operating*) 19 Apr 2022 Bank Guarantee/Letter of Guarantee Short Term 12.00 ACUITE A4+ (Downgraded & Issuer not co-operating* from ACUITE A3+) Proposed Bank Guarantee Short Term 10.10 ACUITE A4+ (Downgraded & Issuer not co-operating* from ACUITE A3+) Foreign Currency Term Loan Long Term 12.00 ACUITE BB+ (Downgraded & Issuer not co-operating* from ACUITE BBB | Stable) Proposed Cash Credit Long Term 5.00 ACUITE BB+ (Downgraded & Issuer not co-operating* from ACUITE BBB | Stable) Cash Credit Long Term 8.00 ACUITE BB+ (Downgraded & Issuer not co-operating* from ACUITE BBB | Stable) Working Capital Demand Loan (WCDL) Long Term 3.00 ACUITE BB+ (Downgraded & Issuer not co-operating* from ACUITE BBB | Stable) Covid Emergency Line. Long Term 4.90 ACUITE BB+ (Downgraded & Issuer not co-operating* from ACUITE BBB | Stable)

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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 HDFC Bank Ltd Not avl. / Not appl. Bank Guarantee (BLR) Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 12.00 Simple ACUITE A4 | Downgraded ( from ACUITE A4+ ) HDFC Bank Ltd Not avl. / Not appl. Bank Guarantee (BLR) Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 0.07 Simple ACUITE A4 | Downgraded ( from ACUITE A4+ ) HDFC Bank Ltd Not avl. / Not appl. Bank Guarantee (BLR) Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 5.00 Simple ACUITE A4 | Downgraded ( from ACUITE A4+ ) HDFC Bank Ltd Not avl. / Not appl. Bank Guarantee (BLR) Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 5.00 Simple ACUITE A4 | Downgraded ( from ACUITE A4+ ) HDFC Bank Ltd Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 24.00 Simple ACUITE C | Downgraded ( from ACUITE BB+ ) HDFC Bank Ltd Not avl. / Not appl. Covid Emergency Line. Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 1.22 Simple ACUITE C | Downgraded ( from ACUITE BB+ ) HDFC Bank Ltd Not avl. / Not appl. Foreign Currency Term Loan 01 Feb 2020 Not avl. / Not appl. 30 Jun 2025 3.42 Simple ACUITE C | Downgraded ( from ACUITE BB+ ) Not Applicable Not avl. / Not appl. Proposed Bank Guarantee Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 0.03 Simple ACUITE A4 | Downgraded ( from ACUITE A4+ ) Not Applicable Not avl. / Not appl. Proposed Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 0.41 Simple ACUITE C | Downgraded ( from ACUITE BB+ ) HDFC Bank Ltd Not avl. / Not appl. Working Capital Demand Loan (WCDL) Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 2.85 Simple ACUITE C | Downgraded ( from ACUITE BB+ ) HDFC Bank Ltd Not avl. / Not appl. Working Capital Term Loan 10 Aug 2023 Not avl. / Not appl. 10 Aug 2031 15.00 Simple ACUITE C | Downgraded ( from ACUITE BB+ )

Contacts

Mohit Jain Senior Vice President - Rating Operations Divya Bagmar 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.