Rating Advisory
December 17, 2021 | Mumbai Adarsh BirmechaOriginal Template1 23
Sai Spacecon India Private Limited
Advisory as on December 17, 2021
This rating advisory is provided in relation to the rating of Sai Spacecon India Private Limited
The key rating sensitivity factors for the rating include:
Upward factors
• Improved occupancy levels of more than 90% leading to higher rentals income and healthy
selling of residential flats
• Strengthening of the financial risk profile
Downward factors
• Unanticipated debt-funded project leading to stretch in the overall liquidity, with debt service
coverage ratio of less than 1.1 times
• Stretched working capital cycle
CRISIL Ratings has a policy of keeping its accepted ratings under constant and ongoing
monitoring and review. Accordingly, it seeks regular updates from companies on business and
financial performance. CRISIL Ratings is yet to receive adequate information from Sai Spacecon
India Private Limited (SSIPL) to enable it to undertake a rating review. CRISIL Ratings is taking all
possible efforts to get the rated entity to cooperate with its rating process for enabling it to carry
out the rating review.
CRISIL Ratings views information availability risk as a key factor in its assessment of credit risk.
(Please refer to CRISIL Ratings’ criteria available at the following link,
[Link]
[Link])
If SSIPL continues to delay the provisioning of information required by CRISIL Ratings to
undertake a rating review then, in accordance with circulars
SEBI/HO/MIRSD/MIRSD4/CIR/P/2016/119 dt Nov 1, 2016, SEBI/HO/MIRSD/ MIRSD4/ CIR/ P/
2017/ 71 dt June 30, 2017 and SEBI/HO/MIRSD/CRADT/CIR/P/2020/2 dt January 3, 2020
issued by Securities and Exchange Board of India, CRISIL Ratings will carry out the review based
on best available information and issue a press release.
About the Company
SSIPL was established as a proprietorship firm by Mr Subhash Nelge in 1993 and was
reconstituted as a private limited company in May 2011. It is part of the Pune-based Sai group
and is engaged in residential and commercial real estate development, primarily in Pune and the
vicinity. Operations are managed by Mr Subhash Nelge, Mr Shivkumar Nelge and Ms Babita
Nelge.
About CRISIL Ratings Limited (A subsidiary of CRISIL Limited)
CRISIL Ratings pioneered the concept of credit rating in India in 1987. With a tradition of independence,
analytical rigour and innovation, we set the standards in the credit rating business. We rate the entire range of
debt instruments, such as, bank loans, certificates of deposit, commercial paper, non-convertible / convertible /
partially convertible bonds and debentures, perpetual bonds, bank hybrid capital instruments, asset-backed and
mortgage-backed securities, partial guarantees and other structured debt instruments. We have rated over
33,000 large and mid-scale corporates and financial institutions. We have also instituted several innovations in
India in the rating business, including rating municipal bonds, partially guaranteed instruments and infrastructure
investment trusts (InvITs).
CRISIL Ratings Limited ("CRISIL Ratings") is a wholly-owned subsidiary of CRISIL Limited ("CRISIL"). CRISIL
Ratings Limited is registered in India as a credit rating agency with the Securities and Exchange Board of India
("SEBI").
For more information, visit [Link]
About CRISIL Limited
CRISIL is a global analytical company providing ratings, research, and risk and policy advisory services. We are
India's leading ratings agency. We are also the foremost provider of high-end research to the world's largest
banks and leading corporations.
CRISIL is majority owned by S&P Global Inc., a leading provider of transparent and independent ratings,
benchmarks, analytics and data to the capital and commodity markets worldwide
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CRISIL Ratings uses the prefix ‘PP-MLD’ for the ratings of principal-protected market-linked debentures (PPMLD) with effect from
November 1, 2011 to comply with the SEBI circular, "Guidelines for Issue and Listing of Structured Products/Market Linked Debentures".
The revision in rating symbols for PPMLDs should not be construed as a change in the rating of the subject instrument. For details on
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Rating Rationale
February 01, 2021 | Mumbai
Sai Spacecon India Private Limited
'CRISIL B- / Stable' assigned to Bank Debt
Rating Action
Total Bank Loan Facilities Rated Rs.15 Crore
Long Term Rating CRISIL B-/Stable (Assigned)
1 crore = 10 million
Refer to Annexure for Details of Instruments & Bank Facilities
Detailed rationale
CRISIL Ratings has assigned its 'CRISIL B-/Stable' rating to the long-term bank facilities of Sai Spacecon India Private
Limited (SSIPL).
The rating reflects the company’s modest scale of operations amid intense competition and susceptibility to cyclicality
inherent in the real estate industry. These weaknesses are partially offset by the extensive experience of the promoters.
Analytical Approach:
Unsecured loans of Rs.32.75 crores (as on March 31, 2020) have been treated as Neither Debt nor Equity (NDNE), as they
are expected to be retained in business over medium term.
Key rating drivers and detailed description
Weaknesses:
Modest scale of operations amid intense competition: Scale of operations is modest on account of sluggish
occupancy levels and large inventory, as reflected in revenue of Rs 5.0 crore in fiscal 2020. Further sell-out of inventory
in residential projects will remain a key monitorable over the medium term.
Susceptibility to cyclicality inherent in the real estate industry: The real estate sector is affected by volatility in
prices, opaque transactions and intense competition. Moreover, multiplicity of property laws and non-standardised
government regulations can affect the tenure of project execution. This risk is compounded by aggressive completion
timelines and shortage of manpower (project engineers and skilled labour) in this sector. The credit risk profile is
expected to be driven by the level of economic activity and the outlook for the real estate sector, and any adverse impact
of changes in the overall economic environment is likely to affect the segment. For instance, slowdown in the real estate
market has resulted in high unsold inventory, thus weakening the financial risk profile and liquidity.
Strengths:
Extensive experience of the promoters: The two-decade-long experience of the promoters in the real estate industry
will continue to support the company’s business risk profile.
Liquidity: Stretched
Bank limit utilisation averaged 90% over the 12 months through December 2020. The liquidity has remained stretched
historically with fully utilized bank lines. Although lease generated from commercial estates remains adequate for covering
the debt obligation, liquidation of residential inventory and moderate occupancy in commercial estate will remain critical for
sustaining liquidity for upcoming projects.
Outlook: Stable
SSIPL will continue to benefit from the promoters’ extensive experience.
Rating sensitivity factors
Upward factors
Improved occupancy levels of more than 90% leading to higher rentals income and healthy selling of residential flats
Strengthening of the financial risk profile
Downward factors
Unanticipated debt-funded project leading to stretch in the overall liquidity, with debt service coverage ratio of less than
1.1 times
Stretched working capital cycle
About the company
SSIPL was established as a proprietorship firm by Mr Subhash Nelge in 1993 and was reconstituted as a private limited
company in May 2011. It is part of the Pune-based Sai group and is engaged in residential and commercial real estate
development, primarily in Pune and the vicinity. Operations are managed by Mr Subhash Nelge, Mr Shivkumar Nelge and
Ms Babita Nelge.
Key financial indicators
Particulars Unit 2020* 2019
Revenue Rs crore 5.02 4.15
Profit after tax (PAT) Rs crore 1.42 0.46
PAT margin % 28.2% 11.1%
Adjusted debt / adjusted networth Times 0.48 0.57
Interest coverage Times 3.78 1.48
*Provisional
Any other information: Not applicable
Note on complexity levels of the rated instrument:
CRISIL complexity levels are assigned to various types of financial instruments. The CRISIL complexity levels are available
on [Link]/complexity-levels. Users are advised to refer to the CRISIL complexity levels for instruments that they
consider for investment. Users may also call the Customer Service Helpdesk with queries on specific instruments.
Annexure - Details of Instrument(s)
Date of Coupon Maturity Issue size Complexity Rating assigned
ISIN Name of instrument
allotment rate (%) date (Rs crore) Levels with outlook
NA Cash Credit NA NA NA 2.5 NA CRISIL B-/Stable
NA Term Loan NA NA Mar-25 2.52 NA CRISIL B-/Stable
Proposed Long Term
NA NA NA NA 9.98 NA CRISIL B-/Stable
Bank Loan Facility
Annexure - Rating History for last 3 Years
Start of
Current 2021 (History) 2020 2019 2018
2018
Outstanding
Instrument Type Rating Date Rating Date Rating Date Rating Date Rating Rating
Amount
Fund Based CRISIL CRISIL
LT 15.0 -- 23-12-20 Withdrawn 27-09-19 11-09-18 CRISIL D CRISIL D
Facilities B-/Stable B-/Stable
All amounts are in [Link].
Annexure - Details of various bank facilities
Current facilities Previous facilities
Amount Amount
Facility Rating Facility Rating
([Link]) ([Link])
CRISIL
Cash Credit 2.5 Cash Credit 2.5 Withdrawn
B-/Stable
Proposed Long Term CRISIL Proposed Long Term
9.98 26.75 Withdrawn
Bank Loan Facility B-/Stable Bank Loan Facility
CRISIL
Term Loan 2.52 Term Loan 30.75 Withdrawn
B-/Stable
Total 15 - Total 60 -
Links to related criteria
CRISILs Approach to Financial Ratios
Rating criteria for manufaturing and service sector companies
CRISILs Bank Loan Ratings - process, scale and default recognition
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About CRISIL Ratings Limited
CRISIL Ratings pioneered the concept of credit rating in India in 1987. With a tradition of independence, analytical rigour and
innovation, we set the standards in the credit rating business. We rate the entire range of debt instruments, such as, bank loans,
certificates of deposit, commercial paper, non-convertible / convertible / partially convertible bonds and debentures, perpetual
bonds, bank hybrid capital instruments, asset-backed and mortgage-backed securities, partial guarantees and other structured
debt instruments. We have rated over 33,000 large and mid-scale corporates and financial institutions. We have also instituted
several innovations in India in the rating business, including rating municipal bonds, partially guaranteed instruments and
infrastructure investment trusts (InvITs).
CRISIL Ratings Limited ("CRISIL Ratings") is a wholly-owned subsidiary of CRISIL Limited ("CRISIL"). CRISIL Ratings Limited is
registered in India as a credit rating agency with the Securities and Exchange Board of India ("SEBI").
For more information, visit [Link]/ratings
About CRISIL Limited
CRISIL is a global analytical company providing ratings, research, and risk and policy advisory services. We are India's leading
ratings agency. We are also the foremost provider of high-end research to the world's largest banks and leading corporations.
CRISIL is majority owned by S&P Global Inc., a leading provider of transparent and independent ratings, benchmarks, analytics
and data to the capital and commodity markets worldwide
For more information, visit [Link]
Connect with us: TWITTER | LINKEDIN | YOUTUBE | FACEBOOK
CRISIL PRIVACY NOTICE
CRISIL respects your privacy. We may use your contact information, such as your name, address, and email id to fulfil your request and service your
account and to provide you with additional information from [Link] further information on CRISIL’s privacy policy please visit [Link].
DISCLAIMER
This disclaimer forms part of and applies to each credit rating report and/or credit rating rationale (each a "Report") that is provided by CRISIL Ratings Limited
(hereinafter referred to as "CRISIL Ratings") . For the avoidance of doubt, the term "Report" includes the information, ratings and other content forming part of the
Report. The Report is intended for the jurisdiction of India only. This Report does not constitute an offer of services. Without limiting the generality of the foregoing,
nothing in the Report is to be construed as CRISIL Ratings providing or intending to provide any services in jurisdictions where CRISIL Ratings does not have the
necessary licenses and/or registration to carry out its business activities referred to above. Access or use of this Report does not create a client relationship between
CRISIL Ratings and the user.
We are not aware that any user intends to rely on the Report or of the manner in which a user intends to use the Report. In preparing our Report we have not taken
into consideration the objectives or particular needs of any particular user. It is made abundantly clear that the Report is not intended to and does not constitute an
investment advice. The Report is not an offer to sell or an offer to purchase or subscribe for any investment in any securities, instruments, facilities or solicitation of
any kind or otherwise enter into any deal or transaction with the entity to which the Report pertains. The Report should not be the sole or primary basis for any
investment decision within the meaning of any law or regulation (including the laws and regulations applicable in the US).
Ratings from CRISIL Ratings are statements of opinion as of the date they are expressed and not statements of fact or recommendations to purchase, hold, or sell
any securities / instruments or to make any investment decisions. Any opinions expressed here are in good faith, are subject to change without notice, and are only
current as of the stated date of their issue. CRISIL Ratings assumes no obligation to update its opinions following publication in any form or format although CRISIL
Ratings may disseminate its opinions and analysis. Rating by CRISIL Ratings contained in the Report is not a substitute for the skill, judgment and experience of the
user, its management, employees, advisors and/or clients when making investment or other business decisions. The recipients of the Report should rely on their own
judgment and take their own professional advice before acting on the Report in any way. CRISIL Ratings or its associates may have other commercial transactions
with the company/entity.
Neither CRISIL Ratings nor its affiliates, third party providers, as well as their directors, officers, shareholders, employees or agents (collectively, "CRISIL Ratings
Parties") guarantee the accuracy, completeness or adequacy of the Report, and no CRISIL Ratings Party shall have any liability for any errors, omissions, or
interruptions therein, regardless of the cause, or for the results obtained from the use of any part of the Report. EACH CRISIL RATINGS' PARTY DISCLAIMS ANY
AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY, SUITABILITY OR FITNESS
FOR A PARTICULAR PURPOSE OR USE. In no event shall any CRISIL Ratings Party be liable to any party for any direct, indirect, incidental, exemplary,
compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and
opportunity costs) in connection with any use of any part of the Report even if advised of the possibility of such damages.
CRISIL Ratings may receive compensation for its ratings and certain credit-related analyses, normally from issuers or underwriters of the instruments, facilities,
securities or from obligors. CRISIL Rating's public ratings and analysis as are required to be disclosed under the regulations of the Securities and Exchange Board of
India (and other applicable regulations, if any) are made available on its web sites, [Link] (free of charge). Reports with more detail and additional
information may be available for subscription at a fee - more details about ratings by CRISIL Ratings are available here: [Link].
CRISIL Ratings and its affiliates do not act as a fiduciary. While CRISIL Ratings has obtained information from sources it believes to be reliable, CRISIL Ratings does
not perform an audit and undertakes no duty of due diligence or independent verification of any information it receives and / or relies in its Reports. CRISIL Ratings
has established policies and procedures to maintain the confidentiality of certain non-public information received in connection with each analytical process. CRISIL
Ratings has in place a ratings code of conduct and policies for analytical firewalls and for managing conflict of interest. For details please refer to:
[Link]
Rating criteria by CRISIL Ratings are generally available without charge to the public on the CRISIL Ratings public web site, [Link]. For latest rating
information on any instrument of any company rated by CRISIL Ratings you may contact CRISIL RATING DESK at CRISILratingdesk@[Link], or at (0091) 1800
267 1301.
This Report should not be reproduced or redistributed to any other person or in any form without a prior written consent of CRISIL Ratings.
All rights reserved @ CRISIL Ratings Limited. CRISIL Ratings Limited is a wholly owned subsidiary of CRISIL Limited.
CRISIL Ratings uses the prefix ‘PP-MLD’ for the ratings of principal-protected market-linked debentures (PPMLD) with effect from November 1, 2011 to comply with
the SEBI circular, "Guidelines for Issue and Listing of Structured Products/Market Linked Debentures". The revision in rating symbols for PPMLDs should not be
construed as a change in the rating of the subject instrument. For details on CRISIL Ratiings' use of 'PP-MLD' please refer to the notes to Rating scale for Debt
Instruments and Structured Finance Instruments at the following link: [Link]/ratings/[Link]
