mergedfile · sarjapur road. issue details - rs 210 crs vdpl proposes to issue structured...
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Rating Rationale
Vismaya Developers Pvt Ltd
6th June 2017
Brickwork Ratings assigns Rating for the Proposed Secured, Non-Convertible Debenture Issue
of Rs. 210 Crs of Vismaya Developers Pvt Ltd (VDPL or ‘the Company’).
Particulars
Amount(Rs. Crs)
Tenure Rating Assigned*
Proposed NCDIssue
210.00
(Rs. Two Hundred & TenCrores Only)
Long Term
BWR BB+(Pronounced BWR Double B
Plus)
(Outlook: Stable)*Please refer to BWR website www.brickworkratings.com/ for definition of the ratings
BWR has principally relied upon the group strength and audited financials results of the
Company up to FY16, draft term sheet of the issue, publicly available information and
information/clarifications provided by the Company’s management.
Rationale/Description of Key Rating Drivers/Rating sensitivities:
The rating factors experienced promoter group(Adarsh Developers), favourable project location
for the upcoming projects, group’s established track record in real estate segment, demonstrated
ability of the promoter’s to successfully complete residential and commercial projects.
However, the rating is constrained by the fact that project for which NCDs are being raised is at
nascent stage with several approvals relating to the project is still pending; accordingly the
project faces high regulatory ,execution and marketing risk, high dependence on customer
advances. The rating is further constrained by the ongoing weak macro-economic scenario and
highly competitive/uncertainty of the Bangalore real estate market as well as cyclicality in the
real estate industry thereby affecting salability of the Company’s projects/project cash flows.
1 6th June 2017
Rating Outlook: Stable
BWR believes the Vismaya Developers Pvt Ltd.’s business risk profile will be maintained over
the medium term. The ‘Stable’ outlook indicates a low likelihood of rating change over the
medium term. The rating outlook may be revised to 'Positive' in case the revenues and profit
show sustained improvement. The rating outlook may be revised to 'Negative' if the revenues go
down and profit margins show lower than expected figures.
About the Company
Vismaya Developers Pvt Ltd (VDPL) was incorporated in August 2011. The company is engaged
in the business of property development and land acquisition activities. VDPL belongs to the
Bangalore based Adarsh Group which has its operations in real estate construction and
development. The Adarsh Group was started by Mr. BM Jayeshankar in 1988 in Bangalore. The
flagship company of the group is Adarsh Developers. The Group is managed by Mr. BM
Jayeshankar and his younger brother Mr. BM Karunesh supported by a team of professionals.
Adarsh is acknowledged as a leading developer in the Bangalore market and renowned for its
quality of construction within the proposed timelines.
The Company,currently,has one project in its portfolio. The project is situated in the off
Sarjapur Road.
Issue Details - Rs 210 Crs
VDPL proposes to issue Structured Redeemable NCD of Rs 210 Crs with tenor upto 39 Months
with coupon of 12.00% per annum (simple interest) which will be accrued and payable at the
end of each quarter or part thereof. However, the payment of coupon for the first six quarters
will be paid at the end of the sixth quarter from the date of investment but not later than
December 31, 2018. The IRR offered are 20.25%. The proposed NCD is secured by land
measuring 33.55 acres standing in the name of the issuer. In addition cross collateralization by
Orchids Apartments Private Limited on the land measuring 19.49 acres. Max LTV of 70%. In
case of any breach in Security Cover, Promoters to top up the security within 30 days as
acceptable to the Investors.
Additionally NCDs are secured by the personal guarantee by the partners of Adarsh Developers.
2 6th June 2017
The rating is subject to the terms of issue being in line with draft provided to us and their
compliance with the requisite terms of the issue, regulatory and legal requirements.
Company Financial Performance
The project is yet to be implemented.
Rating History for the last three years (including withdrawn/suspended ratings)
Instrument/Facility Current Rating (Year 2017) Rating History
Type Amount(Rs Crs
Rating 2016 2015 2014
Proposed NCD Issue Long Term 210.00 BWR BB+ (Stable)
Not Rated
Hyperlink/Reference to applicable Criteria
• General Criteria
• Approach to Financial Ratios
Analytical Contacts Media
Mr. A.P. Kamath, General Manager and Chair Person (CP) – Ratings.
Relationship [email protected]
Phone: 1-860-425-2742
For print and digital mediaThe Rating Rationale is sent to you for the sole purpose of dissemination through your print, digital or electronic media. While itmay be used by you acknowledging credit to BWR, please do not change the wordings in the rationale to avoid conveying ameaning different from what was intended by BWR. BWR alone has the sole right of sharing (both direct and indirect) itsrationales for consideration or otherwise through any print or electronic or digital media.
Note on complexity levels of the rated instrument:BWR complexity levels are meant for educating investors. The BWR complexity levels are availableat www.brickworkratings.com/download/ComplexityLevels.pdf Investors queries can be sent to [email protected].
About Brickwork Ratings
3 6th June 2017
Brickwork Ratings (BWR), a SEBI registered Credit Rating Agency, has also been accredited by RBI andempaneled by NSIC, offers Bank Loan, NCD, Commercial Paper, MSME ratings and grading services.NABARD has empaneled Brickwork for MFI and NGO grading. BWR is accredited by IREDA & theMinistry of New and Renewable Energy (MNRE), Government of India. Brickwork Ratings has CanaraBank, a Nationalized Bank, as its promoter and strategic partner.
BWR has its corporate office in Bengaluru and a country-wide presence with its offices in Ahmedabad,Chandigarh, Chennai, Guwahati, Hyderabad, Kolkata, Mumbai and New Delhi along with representativesin 150+ locations. BWR has rated debt instruments/bonds/bank loans, securitized paper of over ₹9,30,000 Cr. In addition, BWR has rated about 5000 MSMEs. Also, Fixed Deposits and CommercialPapers etc. worth over ₹19,700 Cr have been rated. Brickwork has a major presence in rating of nearly100 cities.
DISCLAIMER
Brickwork Ratings (BWR) has assigned the rating based on the information obtained from the issuer and other reliable sources,which are deemed to be accurate. BWR has taken considerable steps to avoid any data distortion; however, it does not examine theprecision or completeness of the information obtained. And hence, the information in this report is presented “as is” without anyexpress or implied warranty of any kind. BWR does not make any representation in respect to the truth or accuracy of any suchinformation. The rating assigned by BWR should be treated as an opinion rather than a recommendation to buy, sell or hold therated instrument and BWR shall not be liable for any losses incurred by users from any use of this report or its contents. BWR hasthe right to change, suspend or withdraw the ratings at any time for any reasons.
4 6th June 2017
Rating Rationale
Vismaya Developers Pvt Ltd
6th June 2017
Brickwork Ratings assigns Rating for the Proposed Secured, Non-Convertible Debenture Issue
of Rs. 210 Crs of Vismaya Developers Pvt Ltd (VDPL or ‘the Company’).
Particulars
Amount(Rs. Crs)
Tenure Rating Assigned*
Proposed NCDIssue
210.00
(Rs. Two Hundred & TenCrores Only)
Long Term
BWR BB+(Pronounced BWR Double B
Plus)
(Outlook: Stable)*Please refer to BWR website www.brickworkratings.com/ for definition of the ratings
BWR has principally relied upon the group strength and audited financials results of the
Company up to FY16, draft term sheet of the issue, publicly available information and
information/clarifications provided by the Company’s management.
Rationale/Description of Key Rating Drivers/Rating sensitivities:
The rating factors experienced promoter group(Adarsh Developers), favourable project location
for the upcoming projects, group’s established track record in real estate segment, demonstrated
ability of the promoter’s to successfully complete residential and commercial projects.
However, the rating is constrained by the fact that project for which NCDs are being raised is at
nascent stage with several approvals relating to the project is still pending; accordingly the
project faces high regulatory ,execution and marketing risk, high dependence on customer
advances. The rating is further constrained by the ongoing weak macro-economic scenario and
highly competitive/uncertainty of the Bangalore real estate market as well as cyclicality in the
real estate industry thereby affecting salability of the Company’s projects/project cash flows.
1 6th June 2017
Rating Outlook: Stable
BWR believes the Vismaya Developers Pvt Ltd.’s business risk profile will be maintained over
the medium term. The ‘Stable’ outlook indicates a low likelihood of rating change over the
medium term. The rating outlook may be revised to 'Positive' in case the revenues and profit
show sustained improvement. The rating outlook may be revised to 'Negative' if the revenues go
down and profit margins show lower than expected figures.
About the Company
Vismaya Developers Pvt Ltd (VDPL) was incorporated in August 2011. The company is engaged
in the business of property development and land acquisition activities. VDPL belongs to the
Bangalore based Adarsh Group which has its operations in real estate construction and
development. The Adarsh Group was started by Mr. BM Jayeshankar in 1988 in Bangalore. The
flagship company of the group is Adarsh Developers. The Group is managed by Mr. BM
Jayeshankar and his younger brother Mr. BM Karunesh supported by a team of professionals.
Adarsh is acknowledged as a leading developer in the Bangalore market and renowned for its
quality of construction within the proposed timelines.
The Company,currently,has one project in its portfolio. The project is situated in the off
Sarjapur Road.
Issue Details - Rs 210 Crs
VDPL proposes to issue Structured Redeemable NCD of Rs 210 Crs with tenor upto 39 Months
with coupon of 12.00% per annum (simple interest) which will be accrued and payable at the
end of each quarter or part thereof. However, the payment of coupon for the first six quarters
will be paid at the end of the sixth quarter from the date of investment but not later than
December 31, 2018. The IRR offered are 20.25%. The proposed NCD is secured by land
measuring 33.55 acres standing in the name of the issuer. In addition cross collateralization by
Orchids Apartments Private Limited on the land measuring 19.49 acres. Max LTV of 70%. In
case of any breach in Security Cover, Promoters to top up the security within 30 days as
acceptable to the Investors.
Additionally NCDs are secured by the personal guarantee by the partners of Adarsh Developers.
2 6th June 2017
The rating is subject to the terms of issue being in line with draft provided to us and their
compliance with the requisite terms of the issue, regulatory and legal requirements.
Company Financial Performance
The project is yet to be implemented.
Rating History for the last three years (including withdrawn/suspended ratings)
Instrument/Facility Current Rating (Year 2017) Rating History
Type Amount
(Rs Crs
Rating 2016 2015 2014
Proposed NCD Issue Long Term 210.00 BWR BB+
(Stable)
Not Rated
Hyperlink/Reference to applicable Criteria
• General Criteria
• Approach to Financial Ratios
Analytical Contacts Media
Mr. A.P. Kamath, General Manager and Chair Person (CP) – Ratings.
Relationship Contact
Phone: 1-860-425-2742
For print and digital media
The Rating Rationale is sent to you for the sole purpose of dissemination through your print, digital or electronic media. While itmay be used by you acknowledging credit to BWR, please do not change the wordings in the rationale to avoid conveying ameaning different from what was intended by BWR. BWR alone has the sole right of sharing (both direct and indirect) itsrationales for consideration or otherwise through any print or electronic or digital media.
Note on complexity levels of the rated instrument:
BWR complexity levels are meant for educating investors. The BWR complexity levels are availableat www.brickworkratings.com/download/ComplexityLevels.pdf Investors queries can be sent to [email protected].
About Brickwork Ratings
3 6th June 2017
Brickwork Ratings (BWR), a SEBI registered Credit Rating Agency, has also been accredited by RBI and
empaneled by NSIC, offers Bank Loan, NCD, Commercial Paper, MSME ratings and grading services.NABARD has empaneled Brickwork for MFI and NGO grading. BWR is accredited by IREDA & the
Ministry of New and Renewable Energy (MNRE), Government of India. Brickwork Ratings has Canara
Bank, a Nationalized Bank, as its promoter and strategic partner.
BWR has its corporate office in Bengaluru and a country-wide presence with its offices in Ahmedabad,Chandigarh, Chennai, Guwahati, Hyderabad, Kolkata, Mumbai and New Delhi along with representatives
in 150+ locations. BWR has rated debt instruments/bonds/bank loans, securitized paper of over ₹
9,30,000 Cr. In addition, BWR has rated about 5000 MSMEs. Also, Fixed Deposits and CommercialPapers etc. worth over ₹19,700 Cr have been rated. Brickwork has a major presence in rating of nearly
100 cities.
DISCLAIMER
Brickwork Ratings (BWR) has assigned the rating based on the information obtained from the issuer and other reliable sources,which are deemed to be accurate. BWR has taken considerable steps to avoid any data distortion; however, it does not examine theprecision or completeness of the information obtained. And hence, the information in this report is presented “as is” without anyexpress or implied warranty of any kind. BWR does not make any representation in respect to the truth or accuracy of any such
information. The rating assigned by BWR should be treated as an opinion rather than a recommendation to buy, sell or hold therated instrument and BWR shall not be liable for any losses incurred by users from any use of this report or its contents. BWR hasthe right to change, suspend or withdraw the ratings at any time for any reasons.
4 6th June 2017
Rating Rationale
Vismaya Developers Pvt Ltd
6th June 2017
Brickwork Ratings assigns Rating for the Proposed Secured, Non-Convertible Debenture Issue
of Rs. 210 Crs of Vismaya Developers Pvt Ltd (VDPL or ‘the Company’).
Particulars
Amount(Rs. Crs)
Tenure Rating Assigned*
Proposed NCDIssue
210.00
(Rs. Two Hundred & TenCrores Only)
Long Term
BWR BB+(Pronounced BWR Double B
Plus)
(Outlook: Stable)*Please refer to BWR website www.brickworkratings.com/ for definition of the ratings
BWR has principally relied upon the group strength and audited financials results of the
Company up to FY16, draft term sheet of the issue, publicly available information and
information/clarifications provided by the Company’s management.
Rationale/Description of Key Rating Drivers/Rating sensitivities:
The rating factors experienced promoter group(Adarsh Developers), favourable project location
for the upcoming projects, group’s established track record in real estate segment, demonstrated
ability of the promoter’s to successfully complete residential and commercial projects.
However, the rating is constrained by the fact that project for which NCDs are being raised is at
nascent stage with several approvals relating to the project is still pending; accordingly the
project faces high regulatory ,execution and marketing risk, high dependence on customer
advances. The rating is further constrained by the ongoing weak macro-economic scenario and
highly competitive/uncertainty of the Bangalore real estate market as well as cyclicality in the
real estate industry thereby affecting salability of the Company’s projects/project cash flows.
1 6th June 2017
Rating Outlook: Stable
BWR believes the Vismaya Developers Pvt Ltd.’s business risk profile will be maintained over
the medium term. The ‘Stable’ outlook indicates a low likelihood of rating change over the
medium term. The rating outlook may be revised to 'Positive' in case the revenues and profit
show sustained improvement. The rating outlook may be revised to 'Negative' if the revenues go
down and profit margins show lower than expected figures.
About the Company
Vismaya Developers Pvt Ltd (VDPL) was incorporated in August 2011. The company is engaged
in the business of property development and land acquisition activities. VDPL belongs to the
Bangalore based Adarsh Group which has its operations in real estate construction and
development. The Adarsh Group was started by Mr. BM Jayeshankar in 1988 in Bangalore. The
flagship company of the group is Adarsh Developers. The Group is managed by Mr. BM
Jayeshankar and his younger brother Mr. BM Karunesh supported by a team of professionals.
Adarsh is acknowledged as a leading developer in the Bangalore market and renowned for its
quality of construction within the proposed timelines.
The Company,currently,has one project in its portfolio. The project is situated in the off
Sarjapur Road.
Issue Details - Rs 210 Crs
VDPL proposes to issue Structured Redeemable NCD of Rs 210 Crs with tenor upto 39 Months
with coupon of 12.00% per annum (simple interest) which will be accrued and payable at the
end of each quarter or part thereof. However, the payment of coupon for the first six quarters
will be paid at the end of the sixth quarter from the date of investment but not later than
December 31, 2018. The IRR offered are 20.25%. The proposed NCD is secured by land
measuring 33.55 acres standing in the name of the issuer. In addition cross collateralization by
Orchids Apartments Private Limited on the land measuring 19.49 acres. Max LTV of 70%. In
case of any breach in Security Cover, Promoters to top up the security within 30 days as
acceptable to the Investors.
Additionally NCDs are secured by the personal guarantee by the partners of Adarsh Developers.
2 6th June 2017
The rating is subject to the terms of issue being in line with draft provided to us and their
compliance with the requisite terms of the issue, regulatory and legal requirements.
Company Financial Performance
The project is yet to be implemented.
Rating History for the last three years (including withdrawn/suspended ratings)
Instrument/Facility Current Rating (Year 2017) Rating History
Type Amount
(Rs Crs
Rating 2016 2015 2014
Proposed NCD Issue Long Term 210.00 BWR BB+
(Stable)
Not Rated
Hyperlink/Reference to applicable Criteria
• General Criteria
• Approach to Financial Ratios
Analytical Contacts Media
Mr. A.P. Kamath, General Manager and Chair Person (CP) – Ratings.
Relationship Contact
Phone: 1-860-425-2742
For print and digital media
The Rating Rationale is sent to you for the sole purpose of dissemination through your print, digital or electronic media. While itmay be used by you acknowledging credit to BWR, please do not change the wordings in the rationale to avoid conveying ameaning different from what was intended by BWR. BWR alone has the sole right of sharing (both direct and indirect) itsrationales for consideration or otherwise through any print or electronic or digital media.
Note on complexity levels of the rated instrument:
BWR complexity levels are meant for educating investors. The BWR complexity levels are availableat www.brickworkratings.com/download/ComplexityLevels.pdf Investors queries can be sent to [email protected].
About Brickwork Ratings
3 6th June 2017
Brickwork Ratings (BWR), a SEBI registered Credit Rating Agency, has also been accredited by RBI and
empaneled by NSIC, offers Bank Loan, NCD, Commercial Paper, MSME ratings and grading services.NABARD has empaneled Brickwork for MFI and NGO grading. BWR is accredited by IREDA & the
Ministry of New and Renewable Energy (MNRE), Government of India. Brickwork Ratings has Canara
Bank, a Nationalized Bank, as its promoter and strategic partner.
BWR has its corporate office in Bengaluru and a country-wide presence with its offices in Ahmedabad,Chandigarh, Chennai, Guwahati, Hyderabad, Kolkata, Mumbai and New Delhi along with representatives
in 150+ locations. BWR has rated debt instruments/bonds/bank loans, securitized paper of over ₹
9,30,000 Cr. In addition, BWR has rated about 5000 MSMEs. Also, Fixed Deposits and CommercialPapers etc. worth over ₹19,700 Cr have been rated. Brickwork has a major presence in rating of nearly
100 cities.
DISCLAIMER
Brickwork Ratings (BWR) has assigned the rating based on the information obtained from the issuer and other reliable sources,which are deemed to be accurate. BWR has taken considerable steps to avoid any data distortion; however, it does not examine theprecision or completeness of the information obtained. And hence, the information in this report is presented “as is” without anyexpress or implied warranty of any kind. BWR does not make any representation in respect to the truth or accuracy of any such
information. The rating assigned by BWR should be treated as an opinion rather than a recommendation to buy, sell or hold therated instrument and BWR shall not be liable for any losses incurred by users from any use of this report or its contents. BWR hasthe right to change, suspend or withdraw the ratings at any time for any reasons.
4 6th June 2017