| Raj Path Infracon PN 42 Private Limited | ||||
| Rating reaffirmed at 'Crisil A- / Stable' | ||||
| 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 reaffirmed its ‘Crisil A-/Stable’ rating on the long-term bank facility of Raj Path Infracon PN 42 Pvt Ltd (RPIPN42PL).
The rating reflects the inherent benefits of the hybrid annuity model (HAM), the completed status of the project, the adequate debt protection metrics, and need-based operational and funding support from the sponsor, Raj Path Infracon Pvt Ltd (RPIPL; ‘Crisil A/Stable/Crisil A1’). These strengths are partially offset by exposure to post-construction risk and risk related to maintenance of the project stretch. |
Analytical approach Crisil Ratings has evaluated the standalone business and financial risk profiles of RPIPN42PL. |
Key rating drivers - Strengths Inherent benefits of HAM: Revenue risk is low in case of HAM projects as the special-purpose vehicles (SPVs) will receive a fixed payment over the concession period of 10 years. Therefore, the company is not exposed to any risk related to insufficient traffic volume for toll generation. The project was completed in December 2022, and five annuities have been received till date.
Adequate debt protection metrics: The SPV has contracted debt of Rs 108.33 crore and the average debt service coverage ratio (DSCR) is expected to be around 1.23 times throughout the loan tenure. Furthermore, it has maintained a debt service reserve account (DSRA) equivalent to six months of debt obligation.
Operational and financial support from the sponsor: Having executed the project, RIIPL will be responsible for the maintenance. The sponsor is expected to meet any increase in operations and maintenance (O&M) expenses during the operational phase, and any shortfall in debt servicing throughout the tenure of the project, in case of a cash flow mismatch. |
Key rating drivers - Weaknesses Delay in receipt of annuities: The SPV has received five annuities till date with a delay of 1-2 months and latest annuity due is yet to be received. Timely receipt of annuities remains critical, given the gap of 30 days between the scheduled date of annuity receipt and due date for repayment. Any significant delay may impact the debt-servicing ability of RPIPN42PL and will, therefore, remain monitorable.
Exposure to risk related to sharp increase in O&M cost: Any significant rise in O&M cost may impact the profitability of the project and hence, DSCRs. Also, timely and full release of annuity from the Public Works Department (PWD) largely depends on proper maintenance of the road. If the road is not maintained as per the standards stipulated in the concession agreement, PWD may not release the annuity or may release only a part of it till the deficiency is remedied. Such instances could jeopardise the SPV’s ability to service its debt in a timely manner. |
Liquidity Strong Liquidity is supported by expected average DSCR of 1.23 times for the loan tenure. Furthermore, the gap of 30 days between the scheduled date of annuity receipt and due date for repayment provides cushion in case of delay in receipt of annuity. The DSRA of six months of principal and interest obligations also aids liquidity. |
Outlook Stable RPIPN42PL will continue to benefit from the inherent benefits of HAM and its comfortable DSCR. |
Rating sensitivity factors Upward factors:
Downward factors:
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About the company RPIPN42PL was incorporated in 2019 by RPIPL to develop two lanes of Vizor- Nimgaon Pillv-Ltkai- Dighanchi - Atpadi-Shephale-Kole-Ghatnandre-Kavathe Mahankal-Belanki-Miraj-Arjunwad road measuring 57.07 kilometer (km) in Madhya Pradesh and Maharastra. The SPV completed the project at a total cost of Rs 319.1 crore and achieved commercial operations date in December 2022. |
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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