| Laxmi Goldorna House Limited | ||||
| 'Crisil BB/Stable' assigned to Bank Debt | ||||
| Rating Action | ||||
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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 BB/Stable’ rating to the long-term bank facility of Laxmi Goldorna House Ltd (LGOHL, a part of the Laxmi group).
The rating reflects the established market position of the company supported by the extensive experience of its promoters in the real estate industry, the comfortable financial risk profile and diversified business lines. These strengths are partially offset by susceptibility to saleability risks associated with the ongoing projects and exposure to cyclicality inherent in the Indian real estate sector. |
Analytical Approach Crisil Ratings has evaluated the standalone business and financial risk profiles of LGOHL. |
Key Rating Drivers & Detailed Description Strengths: Established market position supported by the extensive industry experience of the promoters: LGOHL is a part of the Ahmedabad-based Laxmi group, a prominent and trusted developer with a healthy track record of more than a decade in the real estate business and gold and jewellery segment. The company has a healthy track record of completing projects before time and the same will remain monitorable. It has also completed a few projects without any term loan owing to the promotors’ backing.
Diversified business lines: The promoters have been in the real estate and gold businesses for more than a decade through different companies. After 2017, the company started undertaking both businesses under LGOHL. The real estate business accounted for around 80% of the revenue of the company in fiscal 2024 while the remaining 20% was contributed by the gold and jewellery segment.
Moderate financial risk profile: Saleability and operating profitability are comfortable in the ongoing projects. Furthermore, LGOHL’s ability to accelerate the collections through healthy sales at the launch of any project reduces the dependence on external funding. Moderate collections duly supported the debt coverage indicators with total debt (Rs 101 crore) to total assets (Rs 270-280 crore) ratio of 36% on project cost basis. It is expected to remain comfortable around similar levels over the medium term. Timely customer advances will cushion the financial risk profile of the company.
Weaknesses: Exposure to risks associated with the ongoing projects: The company is executing two residential cum commercial projects, Laxmi 101 and Laxmi Courtyard with 487 residential apartments and 73 shops in Ahmedabad. Laxmi 101 has two blocks of 14 floors each and Laxmi Courtyard has 5 blocks with nine floors each. Construction is in the initial phase with 18.5% and 19.95% completed till March 2025, respectively, and the rest expected to be completed by March 2028 and June 2029, respectively. Only around 11.74% of the total units in Laxmi Courtyard have been booked, leading to modest customer advances. In Laxmi 101 no units have been booked till March 2025. Thus, the operating performance will remain susceptible to timely completion of the projects and flow of customer advances.
Exposure to cyclicality inherent in the Indian real estate industry: The real estate sector in India is cyclical and affected by volatile prices, opaque transactions, and a highly fragmented market structure. Hence, the business risk profile will remain susceptible to risks arising from any industry slowdown. |
Liquidity: Adequate LGOHL has adequate liquidity for funding the construction of its ongoing projects through a mix of customer advances, own funds and bank loans. The customer advances for its ongoing projects have been modest. The cash flow from the ongoing projects is expected to sufficiently meet the term debt obligations. However, any unforeseen delay in project construction might result in cost overrun, thereby affecting debt repayment. Furthermore, any delay in receiving advances from customers is also expected to significantly impact the company’s liquidity. The company has moderate unsold inventory of previous projects of around Rs 61 crore and advance receivables will also aid the liquidity risk profile of the company.
For the gold business, bank limit utilisation was around 90% for the 12 months ended March 2025. |
Outlook: Stable Crisil Ratings believes LGOHL will increase its scale of operations over the medium term supported by significant launch pipeline and healthy saleability in the ongoing projects, while maintaining a low leverage. It will also continue to benefit from the extensive industry experience of its promoters. |
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About the company Incorporated as Laxmi Goldorna House Pvt Ltd on January 7, 2010, in Gujarat, the company was converted into a public limited with the current name on July 25, 2017.
The company is engaged in two business lines: gold trading and job work and real estate development. The company is currently constructing Laxmi 101 and Laxmi Courtyard in Ahmedabad. These projects comprise of 487 residential apartments and 73 shops.
Mr Jayesh Chinubhai Shah and Ms Rupalben Jayeshkumar Shah are the promoters of LGOHL and manage the operations as well. |
Key Financial Indicators
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Any other information: Not Applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
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| 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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