Rating Rationale
February 19, 2024 | Mumbai
Raghuveer Buildcon
'CRISIL BB/Stable' assigned to Bank Debt
Rating Action
Total Bank Loan Facilities Rated Rs.15 Crore
Long Term Rating CRISIL BB/Stable (Assigned)
Note: None of the Directors on CRISIL Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings.
The Board of Directors also does not discuss any ratings at its meetings.
1 crore = 10 million
Refer to Annexure for Details of Instruments & Bank Facilities
Detailed Rationale
CRISIL Ratings has assigned its 'CRISIL BB/Stable' rating to the long-term bank facility of Raghuveer Buildcon (RB).
The rating reflects the extensive experience of the partners in the real estate industry supported by a qualified management
team, the advantageous location of projects, and the low demand and funding risk of the firm. These strengths are partially
offset by exposure to project risks and cyclicality inherent in the domestic real estate industry.
Key Rating Drivers & Detailed Description
Strengths:
Extensive experience of the partners: The partners have experience of around 10 years in the real estate industry. They
have completed various residential and commercial projects in prime locations of Gandhinagar, Gujarat, leading to the
strong market position of the firm.
Advantageous location of projects: The firm is an established real estate developer with presence in prime locations in
and around Gandhinagar. Its ongoing project, Royal Riviera, also in Gandhinagar, is a prominent residential locality. It is
one of the most up-market residential areas comprising multistoried apartments, row houses and bungalows. Demand
is driven by excellent civic amenities and retail facilities, proximity to employment hubs and easy accessibility.
Weaknesses:
Delay in completion of projects: Delay on account of regulatory changes or regulatory approvals can adversely impact
the project. Timely completion depends on customers’ advances. Any change in the inflow of customer advances or
bookings may adversely impact the construction of projects.
Exposure to cyclicality inherent in the Indian real estate industry: The real estate sector in India is cyclical and affected
by volatile prices, opaque transactions and highly fragmented market structure. The business risk profile of the firm
remains susceptible to risks arising from industry slowdown.
Liquidity: Adequate
The firm has adequate liquidity for funding the construction of its ongoing projects as well as upcoming projects. Although
cash flow is likely to remain sufficient to meet term debt obligation, unforeseen delays in project construction might result in
cost overrun, affecting repayment of term debt. Furthermore, delay in customer advances will significantly impact the
liquidity.
Outlook: Stable
CRISIL Ratings believes RB will continue to benefit from the extensive experience of the partners.
Rating Sensitivity factors
Upward factors
Timely completion of projects and higher customer advances resulting in substantial cash flow from operations
Healthy bookings above 80%.
Downward factors
Low cash flow from operations (because of subdued response to, or delay in completion of, projects) weakening the
financial risk profile and liquidity.
Decline in cash buffer ratio to less than 1.5 times.
About the Company
It is mainly engaged in residential and commercial real estate development mainly in Gujarat. Anita Vijaysinh Raol, Darshan
Bhailal Patel, Dharmik Ashvinkumar Govani, Dhruv Vallabh Patel, Hardik Ramesh Patel, Hasmukhbharthi Rameshbharthi
Gausai, Ishwarji Pratapji Thakor, Jayna Ghanshyamsinh Chavda, Kirit Nanubhai Vekariya, Manisha Sughendrasinh Chavda,
Pravina Ghanshyamsinh Vaghela and Sanjaykumar Narayan Patel are the partners.
Key Financial Indicators
As on/for the period ended March 31 Unit 2023* 2022*
Operating income Rs.Crore 0.00 0.00
Reported profit after tax (PAT) Rs.Crore 0.00 0.00
PAT margin % NA NA
Adjusted debt/adjusted networth Times 6.10 8.50
Interest coverage Times 1.06 1.00
*Project stage
Status of non cooperation with previous CRA
RB has not cooperated with Brickworks Ratings India Private Limited which has classified it as non-cooperative vide release
dated 17th Feb, 2023. The reason provided by BWR is non-furnishing of information for monitoring of ratings.
Any other information: Not Applicable
Note on complexity levels of the rated instrument:
CRISIL Ratings` complexity levels are assigned to various types of financial instruments and are included (where
applicable) in the 'Annexure - Details of Instrument' in this Rating Rationale.
CRISIL Ratings will disclose complexity level for all securities - including those that are yet to be placed - based on available
information. The complexity level for instruments may be updated, where required, in the rating rationale published
subsequent to the issuance of the instrument when details on such features are available.
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Annexure - Details of Instrument(s)
ISIN Name of Date of Coupon Maturity Issue size Complexity Rating assigned
instrument allotment rate (%) date (Rs.Crore) level with outlook
NA Term loan NA NA 30-Apr-2028 11.5 NA CRISIL
BB/Stable
NA Overdraft facility NA NA NA 3.5 NA CRISIL
BB/Stable
Annexure - Rating History for last 3 Years
Start of
Current 2024 (History) 2023 2022 2021
2021
Outstanding
Instrument Type Rating Date Rating Date Rating Date Rating Date Rating Rating
Amount
Fund Based
LT 15.0 CRISIL -- -- -- -- --
Facilities BB/Stable
All amounts are in Rs.Cr.
Annexure - Details of Bank Lenders & Facilities
Facility Amount (Rs.Crore) Name of Lender Rating
The Mehsana Urban Co-Op.
Overdraft Facility 3.5 CRISIL BB/Stable
Bank Limited
The Mehsana Urban Co-Op.
Term Loan 11.5 CRISIL BB/Stable
Bank Limited
Criteria Details
Links to related criteria
CRISILs Rating criteria for Real Estate Developers
CRISILs Approach to Financial Ratios
Understanding CRISILs Ratings and Rating Scales
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