CRISIL has assigned its ‘C’ rating to the cash credit facility of Radha Realty Corporation (India) Pvt Ltd (RRCPL), which is part of the Radha group. The rating reflects the past instances of delay by Radha group in servicing its debt due to stretched liquidity; and the group’s exposure to risks related to geographical concentration in revenue profile, and cyclicality in Indian real estate industry. These rating weaknesses are partially offset by the benefits that the Radha group derives from its promoters experience in real estate development.

For arriving at its rating, CRISIL has combined the business and financial risk profiles of RRCPL and Radha Infra Projects (India) Pvt Ltd (RIPPL). This is because the two companies, together referred to as the Radha group, have high operational linkages. Moreover, RRCPL has provided corporate guarantee for the facilities of RIPPL.

About the Group
Radha Realty Corporation (India) Pvt. Ltd. (RRCPL) was incorporated in the year 1997 by Mr. N. Ravindranath Reddy and his brother Mr. N. Govardhana Reddy. The company is into real estate development with its focus on the city of Hyderabad. Radha Infra Projects (India) Private Limited was floated later in the year 2006 and is primarily engaged in subcontracting activities for RRCPL.

The Radha group reported a profit after tax (PAT) of Rs.82.0 million on net sales of Rs.2,233.0 million for 2008-09 (refers to financial year, April 1 to March 31), against a PAT of Rs.328 million on net sales of Rs.1,826 million for 2007-08.