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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 330.00 | ACUITE BB- | Stable | Assigned | - |
| Total Outstanding | 330.00 | - | - |
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Rating Rationale |
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Acuité has assigned its long term rating of ‘ACUITE BB-’ (read as ACUITE Double B Minus) to Rs. 330.00 Cr bank facilities of Yashoda Foundation (YF). The outlook is ‘Stable’.
Rationale for Rating The rating reflects the strong background of the trustees in the health care sector, absence of any offtake/demand risk. The rating also factors in increasing demand for healthcare services and better affordability on the back of increasing awareness and penetration level of health insurance in India. These strengths are however, partly offset by the intense competition from other players operating in the catchment area, restricting the pricing flexibility, which exerts pressure on the trust’s profitability. The ratings continue to be impacted by the regulatory risks in terms of restrictive pricing regulations by the Central and the State Governments, which could constrain the profit margins. Further, recruitment and retention of doctors/ consultants remain key challenges for the entity, given the stiff competition in the healthcare industry. |
| About the Company |
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M/s Yashoda Foundation is a trust, incorporated on 2nd September, 1999 at Ghaziabad with the intention to establish a 635 bed Super speciality Medical Centre in the name of Yashoda Medicity at Shakti Khand II, Indirapuram, Ghaziabad. The trust was founded by Dr. P.N. Arora. The total cost of the project is Rs.419.98 Cr and the Commercial Date of operation is September, 2023.
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| Unsupported Rating |
| Not Applicable |
| Analytical Approach |
| Acuité has considered the standalone business and financial risk profile of YF to arrive at this rating. |
| Key Rating Drivers |
| Strengths |
| Experienced Management
M/s Yashoda Foundation is a trust which was incorporated on 2nd September, 1999 under the leadership of Mr. Prem Narayan Arora, Upasana Arora and other trustees, who are specialized doctors and have long standing experience of running hospitals and medical units. Apart from this, management runs a hospital under the name of Yashoda Super speciality Hospitals Private Limited, Kaushambi unit. The vast experience of the trustees in efficiently managing the hospitals has helped them to maintain healthy relations with reputed client like Aarogya PRP Health Care Services, Aditya Birla Health Insurance Company Limited, AIR India, BHEL and others. No offtake or demand risk Based on the offerings for diverse patients’ base along with focus on Radiology, Maternity, Orthopaedics, Cardiology-OPD etc., demand will be generated for the Hospital. Also, the effort to keep the competitive pricing against the peer hospitals will mitigate the demand risk. Hence low off take/ demand risk is associated with the Hospital. |
| Weaknesses |
| Expected leveraged capital structure
The Trust’s capital structure is expected to remain below average marked by low networth base and high gearing over the medium term. The tangible net worth of the trust improved to Rs.60.86 Cr as on 31st March, 2023 (Prov) as compared to Rs.15.24 Cr as on 31st March 2022 due to infusion of equity capital to the tune of Rs.45.62 Cr by the trustees. Trust proposes to establish a 635 bed Super speciality Medical Centre in the name of Yashoda Medicity at Shakti Khand II, Indirapuram, Ghaziabad. The total cost of project is Rs.419.99 Cr which is to be funded partly through Rs.330 Cr term loan and Rs.89.98 Cr as unsecured loan and promoter’s contribution. The financial closure has been achieved. In this project, up to June 2023, the trust has incurred Rs.127.54 Cr which has been funded by bank loan to the tune of Rs. 70.57 Cr and unsecured loans and promoters’ contribution to the tune of Rs 56.97 Cr. In FY24, the trust is expected to avail part of their term loan to support their capex plan which is expected to leverage their capital structure going forward. The scheduled time for commercial date of operations is 30th September, 2023. However, based on observation, the project is experiencing time overrun as the project got delayed and trust has missed the commercial date of operation. Acuité believes that going forward the financial risk profile of the trust is expected to be below average due to leveraged capital structure over the medium term. Exposure to implementation risk due to early stages of project development Yashoda Foundation is scheduled to commence its project in September 2023 and has already purchased the land and have incurred ~37 per cent of total capex till June,2023. The trust is exposed to execution risk as ~63 per cent of the project cost is yet to be incurred. The management expects the commencement of commercial operations in the first part of FY2025. The project has got extension and has moratorium period of 6 months. Further, Ability to execute the project in a timely manner with no cost overruns and early stabilization of the project are key credit sensitivities. Acuité would continue to monitor the project progress, and the track record of operations, once commercialised, and take rating actions appropriately. |
| Rating Sensitivities |
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| All Covenants |
| None. |
| Liquidity Position |
| Adequate |
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The Trust’s adequate liquidity position is expected to support debt servicing in the near-to-medium term on account of generation of adequate cash accruals post completion. The Cash accruals are expected to be in the range of Rs. 12.89 Cr-87.32 Cr starting from FY25-FY33. The promoters are expected to infuse capital in the form of unsecured loans to support the business. However, timely implementation of the project and generation of expected cash accrual will be key rating sensitivity factors.
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| Outlook: Stable |
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Acuité believes that the trust will maintain a 'Stable' outlook on the basis of the positive outlook in the ethanol industry. The outlook may be revised to 'Positive' in case of timely stabilisation of operations. Conversely, the outlook may be revised to 'Negative' in case of slippages in project execution, significant cost over-run resulting in deterioration in the liquidity and leverage position on a prolonged basis.
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| Other Factors affecting Rating |
| None. |
| Particulars | Unit | FY 23 (Provisional) | FY 22 (Actual) |
| Operating Income | Rs. Cr. | 45.97 | 3.80 |
| PAT | Rs. Cr. | 45.62 | 3.63 |
| PAT Margin | (%) | 99.23 | 95.53 |
| Total Debt/Tangible Net Worth | Times | 0.72 | 0.08 |
| PBDIT/Interest | Times | 15321.72 | 122976.03 |
| Status of non-cooperation with previous CRA (if applicable) |
| None. |
| Any other information |
| None |
| Applicable Criteria |
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• Service Sector: https://www.acuite.in/view-rating-criteria-50.htm • Default Recognition: https://www.acuite.in/view-rating-criteria-52.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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| Rating History : |
| Not Available |
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