Detailed Rationale

Crisil Ratings has reaffirmed its ‘Crisil AA-/Stable’ rating on the long-term bank facilities of Jaganmayi Manor Pvt Ltd (JMPL; part of the Sattva group).

 

The ratings reaffirmation factors in expectation of healthy business risk for Sattva group with sales expected to pick-up from fiscal 2027 to Rs 4,500-5,000 crore over the medium term backed by the group’s strong pipeline over the medium term. The group is expected to diversify to the Mumbai real estate market in fiscal 2027 with projects in Powai and Bhoiwada. The group is estimated to achieve sales (value) of Rs 2,600-2,800 crore in fiscal 2026, up 36% from fiscal 2025. Some of the project launches planned for fiscal 2026 got delayed and are now expected to be launched in fiscal 2027, leading to sales being lower than previously estimated for fiscal 2026.

 

Construction has progressed at a healthy pace, which should support sales and collection. Consequently, collection is expected to increase to Rs 2,700-2,900 crore in fiscal 2027 (up from the expected Rs 1,700 crore in fiscal 2026) and to over Rs 3,500 crore over the medium term, supported by sold receivables, healthy sales in ongoing projects, liquidation of completed projects and steady new launches. Receivables from the sold area in the ongoing projects are adequate to cover around 60% of pending construction cost and debt obligation of ongoing projects as on February 28, 2026.

 

The financial risk profile is likely to remain healthy, though debt in the residential segment is expected to increase to ~Rs 1,500 crore over the medium term (from ~Rs 1,000 crore as of February 2026), supported by strong cash flow from operations (CFO). Despite the significant scale up in operations with upcoming launches, additional debt in the residential segment is expected to be lower owing to strong collection. As a result, debt to CFO ratio is expected to reduce from ~1.85 times (debt adjusted for cash of ~Rs 200 crore in current accounts) in fiscal 2026 to below 1.5 times over the medium term (Crisil Ratings estimates), and the CFO to interest ratio is expected above 7 times over the medium term (Crisil Ratings estimates). However, higher-than-expected debt availed for the residential segment will remain monitorable.

 

Annualised lease rentals with the remaining assets in the Sattva group, as majority of assets have moved to Knowledge Realty Trust (KRT REIT; ‘Crisil AAA/Stable/Crisil A1+’), are expected at Rs 220-250 crore in fiscal 2027 (including Rs 180-190 crore of rentals of the Knowledge Point asset, which is expected to be sold) with leasing of the recently constructed/renovated assets. The operational commercial leasing portfolio has reduced from ~15.2 msf to ~2.8 msf (including Knowledge point asset of 1.75 msf of leasable area) in fiscal 2026. However, despite the reduction in rentals due to this, the group will benefit from the dividends from the real estate investment trust (REIT) units held in KRT REIT. Average debt service coverage ratio (DSCR) for the commercial lease assets, against lease rental discounting (LRD) debt is expected to be strong above 2 times (excluding Knowledge Point asset).

 

Overall debt is expected at around Rs 3,800 crore in fiscal 2026, with incremental debt in the residential segment. The LRD debt is likely to form about 50% of the total debt. Overall debt is expected to increase to Rs 4,500-5,000 crore on account of higher residential segment debt and construction finance debt, but will moderate in fiscal 2028 once the Knowledge Point asset is sold, with reduction in its LRD debt of about Rs 1,800 crore. A significant increase in debt for funding land acquisition or construction will remain a key monitorable.

 

The ratings also factor in the enhanced financial flexibility on account of REIT units held by Sattva Developers Pvt Ltd (SDPL) and Sattva Real Estate Pvt Ltd (both part of Sattva group) aggregating to ~17% of the KRT REIT shareholding, along with SDPL being the sponsor to the KRT REIT, leading to additional liquidity benefit expected from dividends from these REIT units for the Sattva group.

Analytical Approach

To assess the credit risk profile of the Sattva group, Crisil Ratings has combined the financial and business risk profiles of the entities managed by the Sattva group and its promoters and have ongoing or planned real estate projects with external debt contracted to fund these projects.

 

These entities have fungible cash flow, with majority ownership by the Sattva group and its promoters. Additionally, Crisil Ratings has factored in the liquidity benefits derived by the Sattva group from the expected dividend from the units that will be held upon listing of KRT REIT.

 

Crisil Ratings has not combined other businesses such as co-working spaces, co-living spaces, ecommerce, aerospace, technology, finance and investment, as these are not related to the group’s real estate business.

 

Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation.

Key Rating Drivers - Strengths 

• Established development track record and sound saleability of residential projects

With a track record of over three decades, the group is a prominent brand and has an established position in the real estate market in Bengaluru. It has developed around 79.5 msf of residential and commercial area (built up) until February 2026, mainly in Bengaluru and Hyderabad. The group benefits from its healthy reputation and strong relationship with customers, and is now diversifying to Mumbai in fiscal 2027.

 

The group is expected to clock sales (value) of Rs 2,600-2,800 crore in fiscal 2026, up 36% from fiscal 2025. The sales are expected at Rs 4,500-5,000 crore over the medium term on the back of a strong pipeline of launches. The group had ongoing projects with ~13 msf of saleable area (developer share) in the residential segment as on February 28, 2026. These projects had healthy saleability of ~55% and construction progress of ~22% as on that date on account of launch of ~7 msf in fiscal 2025. Collection is expected to be strong at Rs 2,700-2,900 crore in fiscal 2027 (up from around Rs 1,700 crore expected in fiscal 2026) and further to over Rs 3,500 crore over the medium term, supported by sold receivables, healthy sales in ongoing projects, liquidation of completed projects and steady new launches. Strong brand and execution track record help achieve healthy sales at the time of launch. The group is expected to sustain its strong business risk profile over the medium term, backed by stable saleability in ongoing projects and robust pipeline of launches.

 

• Strong financial risk profile in the residential segment

The financial risk profile will be supported by strong collection and cash flow over the medium term, given healthy saleability and sold receivables from ongoing projects as well as expected rise in sales.

 

While debt in the residential segment is expected to increase to ~Rs 1,500 crore over the medium term, the debt metrics will likely remain strong with the debt to CFO ratio less than 1.5 times and CFO to interest of over 7 times. Leverage is likely to remain steady with KRT REIT, expected to be high in fiscal 2026, but should improve to less than 6 times over the medium term (excluding the Knowledge Point asset) with significant additional leasing in fiscal 2027 in the Sattva Techpark commercial asset. 

 

The group avails part of the debt in the form of overdraft funding rather than conventional term loan, which helps manage cash flow better and results in lower interest outflow. It has sufficient cushion for accessing the limit when needed. Steady lease rentals from the commercial portfolio and good saleability in the residential projects should help keep the financial risk profile healthy over the medium term.

 

• Financial risk profile to remain healthy (post-REIT) for the commercial assets portfolio, supported by REIT dividend

The annualised lease rentals are expected to be Rs 220-250 crore in fiscal 2027 (including Rs 180-190 crore rental of the Knowledge Point asset, which is expected to be sold) with leasing of the recently constructed/renovated assets, as majority of assets moved to KRT REIT. The operational commercial leasing portfolio has reduced from ~15.2 msf to ~2.8 msf (including the Knowledge point asset of 1.75 msf of leasable area) in fiscal 2026. The average DSCR for the commercial lease assets against the LRD debt is expected to be strong at over 2.0 times (excluding Knowledge Point asset).

 

However, the same is likely to be supported by annual dividends from units held by Sattva group in KRT REIT.

Key Rating Drivers - Weaknesses 

• Exposure to risks related to leasing of recently developed commercial real estate and subsequent developments 

The group has recently constructed an asset of ~0.78 msf, for which leasing is expected to start in the first quarter of fiscal 2027. It also has an under-construction commercial portfolio of ~9.6 msf in various stages of construction and expected to be developed in phases. Any time or cost overrun and decline in demand and leasing could impact the cash flow and the group may have to raise more debt to meet the obligation on construction finance loans.

 

• Susceptibility to inherent risks in the real estate sector

Cyclicality in the domestic real estate sector leads to fluctuations in cash inflow because of volatility in saleability and realisation while outflow, such as construction cost and debt obligation, remains fixed. Lower-than-expected demand could result in lower collection and adversely impact cash flow. However, the strong track record of the group in Bengaluru mitigates the implementation and demand risks.

Liquidity Strong

Cash and equivalent stood at Rs 136 crore as on February 28, 2026, including unencumbered current account balance of Rs 55 crore and Rs 81 crore in mutual funds. Furthermore, the group had Rs 280 crore of unutilised overdraft lines. Cash flow is expected to be adequate to meet the debt obligation. Liquidity is supported by steady cash flow from the residential sales business. The group has healthy sold receivables and ready unsold inventory from its completed residential projects, which lends stability to cash flow. The receivables from the sold area in the ongoing projects are adequate to cover about 60% of pending construction cost and debt obligation of ongoing projects as on February 28, 2026. Liquidity is also supported by annual dividends from units held by the Sattva group in KRT REIT.

Outlook Stable

Crisil Ratings believes the Sattva group will maintain its strong financial risk profile over the medium term supported by its established market position and scaling up of the residential segment.

Rating sensitivity factors

Upward Factors

• Substantial progress in new launches in the residential segment, translating to significant increase in sales over Rs 5,000 crore on a sustained basis, with higher sales velocity
• Significant increase in collection in the residential segment and lease rentals on a sustained basis, leading to improvement in the cash flow position
• Sustained improvement in debt profile and leverage with reduction of debt in the residential segment, strengthening the group’s financial risk profile and debt protection metrics.

 

Downward Factors

• Weakening of debt protection metrics leading to debt to CFO of more than 1.8 times on a sustained basis in residential business, and sustained deterioration of total debt to annualised rental income levels
• Sustained reduction in saleability, collections and lease rentals leading to deterioration in business risk profile along with delay in completion of projects.
• Any change in the group’s shareholding in KRT REIT which significantly impacts dividend and hence the liquidity

About the Group

The Sattva group is one of India’s leading real estate developers promoted by Bijay Agarwal. The group has projects in commercial, residential, IT parks, hospitality and retail sectors across major cities. It has completed 126 projects and developed around 79.5 msf. It has an operational lease portfolio of 2.8 msf (post the REIT). The group has headquarters in Bengaluru and is spread across Hyderabad, Pune, Mumbai and Chennai. It has built assets such as Sattva Knowledge City, one of the largest business parks in the IT corridor – HITEC City, featuring best-in-class infrastructure and amenities.

Any other information: Not applicable