| Kolte-Patil Developers Limited | ||||||
| 'CRISIL A+/Stable' assigned to Non Convertible Debentures | ||||||
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| 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 A+/Stable’ rating on proposed Listed, secured, Non-Convertible Debentures of Kolte-Patil Developers Limited (KPDL; flagship company of the KPDL group) while reaffirming its ratings on the bank facilities at ‘CRISIL A+/Stable/CRISIL A1’.
The ratings continue to reflect the KPDL group’s strong brand and market position, which will continue to support sales and collections, and comfortable financial risk profile. These strengths are partially offset by concentration in revenue and exposure to risks and cyclicality inherent in the real estate sector.
KPDL has achieved sales of 1.17 msf with sales value of Rs 812 crores in first half of fiscal 2023. The performance was constrained due to delays in launches of certain projects. Projects aggregating 1.5 msf were launched in first half as against 6-8 msf expected for full year. However, the approvals for such projects are in advanced stage and projects aggregating 5-6 msf are expected to be launched in second half of fiscal 2023. Consequently, the scale of KPDL is expected to nearly double over the medium term from the past 3 fiscals. Timely launches alongwith sustained demand in view of headwinds like interest rate and commodity price increase would be key monitorables. Realizations has also increased to ~Rs 7000 per square feet (psf) in first half of fiscal 2023 as against Rs 5,000-6,500 psf in the past. Contribution from projects outside Pune was at 27% of Sales Value during H1 FY23, in line with the business diversification goal.
Financial risk profile remains strong with debt-to-total-assets expected to sustain below 15%. Capital structure is comfortable with gearing below 1 time. Bank Debt is expected to remained low at Rs.500-600 crore over medium term. KPDL will continue to partner with investors for its projects and has now onboarded Marubeni Corporation. |
Analytical Approach CRISIL Ratings has combined the business and financial risk profiles of all ongoing and planned projects in KPDL, its subsidiaries and associate companies. All the entities, collectively referred to as the KPDL group, are in the same business, have common promoters and share significant operational, managerial and financial linkages.
CRISIL Ratings has considered debentures of Rs 94 crore (outstanding as on March 31, 2022) as neither debt nor equity as the debentures do not have any fixed monetary obligation or interest.
Please refer Annexure - List of entities consolidated, which captures the list of entities considered and their analytical treatment of consolidation. |
Key Rating Drivers & Detailed Description Strengths:
Weaknesses:
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Liquidity: Strong Liquidity is supported by strong saleability as well as collections in the ongoing and proposed projects. External borrowing was used to fund around 10% (outstanding debt to total assets) of project cost. Financial flexibility is supplemented by strong refinancing ability, the KPDL group has unsold inventory of around Rs 1450 crore and fully paid-up land bank with development potential of around 16 msf against which additional debt can be contracted, if required. Furthermore, undrawn bank lines stood at Rs 222 crore and cash and equivalent at around Rs 290 crore as on March 31, 2022. |
Outlook: Stable CRISIL Ratings believes the KPDL group will continue to benefit over the medium term from its strong brand and established position. The financial risk profile will be comfortable, driven by low reliance on external debt. |
Rating Sensitivity factors Upward factors
Downward factors
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About the Group Incorporated in 1991, KPDL is promoted by Mr Rajesh Patil, Mr Naresh Patil and Mr Milind Kolte. The KPDL group is one of the largest residential real estate developers in Pune. The company has a healthy project portfolio of affordable and mid-income, and luxury residential segments through its brands, Kolte-Patil and 24K, respectively, and is expanding its presence in Bengaluru and Mumbai.
The group has developed around 23 million sq ft of projects, and currently has 25 ongoing projects comprising around 13 million sq ft. It is expected to launch projects encompassing more than 5 msf in fiscal 2023. The projects are undertaken under KPDL or separate special purpose vehicles, with KPDL being the majority shareholder in the projects. |
Key Financial Indicators (Consolidated)
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Any other information: Not applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
*Emergency Credit Line Guarantee Scheme #yet to be placed |
Annexure –Entities consolidated with KPDL*
*Details as on March 31, 2022 |
| Annexure - Rating History for last 3 Years | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| All amounts are in Rs.Cr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annexure - Details of Bank Lenders & Facilities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Criteria Details
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