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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 275.70 | ACUITE BBB | Stable | Assigned | - |
| Total Outstanding | 275.70 | - | - |
| Total Withdrawn | 0.00 | - | - |
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Rating Rationale |
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Acuite has assigned the long-term rating of ‘ACUITE BBB' (read as ACUITE Triple B) on the Rs. 275.70 Cr. bank facilities of Wagad Netrang Road Private Limited (WNRPL). The outlook is ‘Stable’.
Rationale for Rating The rating assigned reflects the established track record and healthy operating and financial risk profile of the sponsor, Wagad Infraprojects Private Limited (WIPL). The rating also factors in the benefits arising from the strong counterparty profile of the National Highways Authority of India (NHAI), which enhances the overall credit quality of the project along with maintenance of a Debt Service Reserve Account (DSRA) equivalent to six months instalment of principal and interest obligations. However, the rating is constrained by risks associated with the very nascent stage of the project, which contributes to high project execution risk. Any delays in timely execution are likely to impact milestone and annuity payments. The rating is also constrained due to the risks related to changes in operational cost & interest rate. |
| About the Company |
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Gujarat based Wagad Netrang Road Private Limited (WNRPL) was incorporated in 2024. The company has been promoted by Wagad Infraprojects Private Limited (WIPL) for the sole purpose of upgradation of existing Two Lane Carriageway to Four Lane Divided Carriageway from Ch. 179+780 (Existing Km.506.660) in Bitada/Movi Village in Netrang Taluka to Ch. 208+900 (Existing Km. 535.930) in Nasarpore Village in Umarpada Taluka (Length 29.120 Km) Section of NH-56 in the State of Gujarat on Hybrid Annuity Mode (Package V). The Directors of the company are Mr. Ashok jain and Mr. Andesh Jain.
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| Unsupported Rating |
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Acuite BB-/Stable
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| Analytical Approach |
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Acuite has considered the standalone business and financial risk profile of Wagad Netrang Road Private Limited (WNRPL) to arrive at the rating. The financial and operational support from the sponsor Wagad Infraprojects Private Limited (WIPL) factored in for the rating notch up.
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| Key Rating Drivers |
| Strengths |
| Established sponsor profile
Wagad Infraprojects Private Limited (WIPL) is the promoter and sponsor of Wagad Netrang Road Private Limited (WNRPL). The promoters have nearly four decades of experience in civil construction, with a strong execution record across Rajasthan, Madhya Pradesh, and Gujarat through projects for government and private clients. The net worth of the sponsor stood at Rs.177.00 Cr. as on 31st March 2025 (Prov.). WIPL holds 99.75 per cent shares of WNRPL and has provided technical and financial support, including a corporate guarantee, to the project. Further, WIPL has strong financial flexibility, as reflected in its healthy financial risk profile and adequate liquidity position. Acuite believes that the established operational track record and healthy financial risk profile of the sponsor will support WNRPL in completing the project on a timely basis. Waterfall mechanism in ESCROW account and DSRA WNRPL is required to maintain an escrow account with a waterfall mechanism. Under this arrangement, cash flows from the Authority will be routed through the escrow account and utilised as per the defined payment hierarchy. The cash flows will be applied towards operating expenses, debt servicing obligations, and provisions for major maintenance. Any surplus after meeting these obligations may be used at the borrower’s discretion during the concession period. Any mismatch in cash flows due to timing differences between annuity receipts and debt repayments is expected to be met through support from WIPL. The company is also mandated to maintain a Debt Service Reserve Account (DSRA) equivalent to six months of scheduled interest and principal repayments. Low counter party risk The project has been issued and awarded by the National Highways Authority of India (NHAI), which also acts as the concessioning authority. The counterparty risk is considered low, given NHAI’s strong credit profile. WNRPL is scheduled to receive approximately 41 per cent of the project cost as construction grants, while the remaining amount will be disbursed through 30 biannual annuity instalments, tentatively commencing from April 2028. WNRPL will be responsible for operations and maintenance during the concession period, with oversight and support from NHAI. The first milestone payment is expected in December 2025 or January 2026, upon achieving the specified physical progress. |
| Weaknesses |
| High Project Execution Risk
The appointment date for the project is yet to be allotted and is expected by September 2025. The project is currently at very nascent stage, with construction scheduled to commence upon receipt of the appointment date. The first milestone payment is expected by December 2025 or January 2026, upon achieving 5 per cent physical progress. Any delay in timely achievement of milestones may result in cost or time overruns. The total project cost is Rs.604.93 Cr., to be funded through Rs.78.64 Cr. from promoter’s contribution, Rs.250.63 Cr. in the form of milestone-linked grants, and a sanctioned term loan of Rs.275.66 Cr. Against the required promoter’s contribution, Rs.18.00 Cr. (~23 per cent) has been infused as on June 30, 2025. Accordingly, the company remains exposed to high project execution risk and moderate funding risk. Exposed to risks such as delay in receiving annuity payments and any changes in operational cost & interest rate As per the concession agreement, the company is expected to receive a Semi -annual annuity. Any delay in timely receipt of the annuity could adversely impact debt-servicing ability. Along with fixed annuities, the project will receive interest payments on the balance annuities at a rate equivalent of prevailing bank rate plus spread. Further, the company is exposed to risks related to maintenance of the project. If the prescribed standards and timely maintenances of the project are not performed, it will significantly affect the annuity payments. And with any significant delay or deduction in annuities could impact the debt servicing ability of the company. Acuite believes that any delay or deduction in annuities will affect the debt servicing capabilities of the WNRPL. |
| Assessment of Adequacy of Credit Enhancement under various scenarios including stress scenarios (applicable for ratings factoring specified support considerations with or without the “CE” suffix) |
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WNRPL shall be maintaining Debt Service Reserve Account (DSRA) for six-months debt servicing obligation (Principal and Interest) along with the ESCROW waterfall mechanism.
Stress case Scenario
Acuite believes that, given the presence of DSRA mechanism WNRPL will be able to service its debt on time, even in a stress scenario. |
| Rating Sensitivities |
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| Liquidity Position |
| Adequate |
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WNRPL's liquidity profile is adequate, supported by strong financial backing from its parent company, Wagad Infraprojects Private Limited (WIPL). The promoter has infused approximately Rs.18 Cr. to facilitate project execution. Additionally, the company is expected to receive milestone-based grant payments totalling Rs.250.63 Cr. from the National Highways Authority of India (NHAI). A term loan of Rs.275.66 Cr. has also been sanctioned, pending disbursement. The presence of a waterfall mechanism and the requirement to establish a Debt Service Reserve Account (DSRA), equivalent to six months of principal and interest payments, further strengthen the company's liquidity framework by mitigating potential mismatches. Acuité expects WNRPL’s liquidity to remain adequate, supported by continued promoter contributions, assured milestone and annuity inflows backed by NHAI, and a structured financial framework including reserve mechanisms.
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| Outlook: Stable |
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| Other Factors affecting Rating |
| None |
| Particulars | Unit | FY 25 (Provisional) | FY 24 (Actual) |
| Operating Income | Rs. Cr. | 0.00 | 0.00 |
| PAT | Rs. Cr. | (0.62) | 0.00 |
| PAT Margin | (%) | 0.00 | 0.00 |
| Total Debt/Tangible Net Worth | Times | 0.00 | 0.00 |
| PBDIT/Interest | Times | 0.00 | 0.00 |
| Status of non-cooperation with previous CRA (if applicable) |
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None
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| Any other information |
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None
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| Applicable Criteria |
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• Default Recognition :- https://www.acuite.in/view-rating-criteria-52.htm • Infrastructure Sector: https://www.acuite.in/view-rating-criteria-51.htm • Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm • Group And Parent Support: https://www.acuite.in/view-rating-criteria-47.htm |
| Note on complexity levels of the rated instrument |
| Rating History : |
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Not Applicable
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| *Annexure 2 - List of Entities (applicable for Consolidation or Parent / Group / Govt. Support) | ||||||
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