Siddhivinayak Securitisation Trust

(Originator: Sikka Ports & Terminals Limited)

Rating reaffirmed at 'Crisil AAA (SO)'

 

Rating Action

Tranche Name	Amount Rated (Rs.Crore)	Outstanding Amount (Rs.Crore)	Balance Tenure (Months)	Credit Collateral (Rs.Crore)	Ratings/Credit Opinions	Rating Action
PTCs	8000.0	7890.91	~54	-	Crisil AAA (SO)	Reaffirmed

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

 

Detailed Rationale

Crisil Ratings has reaffirmed its ‘Crisil AAA (SO)’ rating on the pass-through certificates (PTCs) issued by Siddhivinayak Securitisation Trust under securitisation transaction originated by Sikka Ports And Terminals Ltd (SPTL; ‘Crisil AAA/Stable/Crisil A1+’).

 

The pool is backed by loan receivables from Digital Fibre Infrastructure Trust (DFIT) and receivables under option agreements with Srichakra Commercials LLP, Karuna Commercials LLP, Devarshi Commercials LLP and Tattvam Enterprises LLP, collectively referred to as option counterparties.

 

The rating is based on the recovery of loan receivables, receivables under option agreements and soundness of the transaction’s legal structure.

 

Transaction structure

Under the transaction structure, the trust has issued PTCs, proceeds of which are paid to the originator as a purchase consideration against assignment of loan receivables and receivables under the option agreements over the tenure of the PTCs. These are purchased by the trust for the benefit of the PTC holders.

 

The loan receivables assigned by the originator to the trust include interest payments and principal repayment of the underlying principal of Rs 6,780.34 crore, extended by the originator to DFIT. The principal and interest obligations in relation to the underlying assigned loan over the tenure of the PTCs are referred to as loan receivables.

 

Furthermore, the originator has entered into a put-call options agreement with the option counterparties before the transaction, which have been assigned by the originator to the trust, by virtue of which the trust has a right to transfer a portion of the assigned loan to the option counterparties. The put option will be compulsorily exercisable on the principal due date against the PTCs, and when exercised, the option counterparties have obligation for the acquisition of the portion of the assigned loan from the trust for the consideration specified. The proceeds from the exercise of the put option by the trust will be used by the trust for the redemption of the PTCs.

 

The principal, of Rs 6,780.34 crore, is determined based on the agreed yield with the investors and the payouts to the investors during the tenure of the PTCs.

 

Catalyst Trusteeship Ltd is appointed as a trustee to monitor the overall transaction on behalf of the investors.

Payment structure

Collection and payout account (CPA) has been opened by the trustee with the designated bank and the trustee is empowered to make timely payout of the collection of the securitised receivables to the PTC holders in accordance with the waterfall mechanism as per the transaction documents. The obligors will make payments in relation to the receivables directly into the CPA.

 

The obligations against PTCs will be serviced over a tenure of five years by payments from DFIT (obligor 1), Srichakra Commercials LLP (obligor 2), Karuna Commercials LLP (obligor 3), Devarshi Commercials LLP (obligor 4), and Tattvam Enterprises LLP (obligor 5).

 

The interest obligation, along with part principal repayment, of 19.20% (1.36% serviced in line with the repayment schedule) against the PTCs will be funded through quarterly payout obligations of DFIT against the assigned loan to the trust. While for the remaining principal repayment, the trust (through trustee) will compulsorily exercise the assigned put option on the put option date, at the end of the tenure of the PTC. Post the put option being exercised, obligors 2 to 5 have an obligation for the acquisition of the balance principal amount of the assigned loan to ensure timely payout to the trust.

 

The ratings factors in the strong credit risk profiles of the obligors and the sound transaction structure.

 

The originator has extended the loan to DFIT at interest of 12.01% per annum payable quarterly up to September 2026 and thereafter at 12.00% per annum payable quarterly for the remaining tenure of the PTCs. Furthermore, DFIT has extended loans to Jio Digital Fibre Pvt Ltd (JDFPL; ‘Crisil AAA/Stable’), against which JDFPL has quarterly interest obligations. By servicing the loans extended to JDFPL, DFIT shall meet its obligation to its lenders, including the trust. JDFPL’s cash flow comes from Reliance Jio Infocomm Ltd (RJIL; ‘Crisil AAA/Stable/Crisil A1+’) under the fibre usage agreement (FUA). JDFPL has executed FUA with its anchor tenant, RJIL, for a tenure of 30 years, thus providing assured revenue visibility. Per terms of the FUA, RJIL pays fixed monthly fibre fees and maintenance fees for using the designated number of fibre pairs. Increase in the operating cost or right-of-way charges will be borne by the anchor tenant, ensuring stable cash flow for JDFPL.

 

Obligors 2-5 are part of the promoter group of Reliance Industries Ltd (RIL; ‘Crisil AAA/Stable/Crisil A1+’), holding substantial equity shares in RIL, and have strong credit profiles. Also, they have a right to honour the obligation on their own or through nominee, provided that they shall, at all times, continue to be liable for the performance of the obligation.

Adequacy of credit enhancement

There is no external credit enhancement in the transaction structure.

Key Rating Drivers & Detailed Description

Strengths:

Strong credit quality of DFIT and other counterparties

The rating continues to factor in the strong credit risk profiles of the obligors. The loan receivables to the trust will be serviced by DFIT, which has given unsecured loans to JDFPL. DFIT owns controlling stake in JDFPL, which houses India’s largest fibre network. JDFPL’s revenue is backed by a 30-year FUA with RJIL, with ~25 years of contractual life remaining. 

 

JDFPL has its own debt obligation against the external loans (basis the current debt schedule). In case of any cash flow mismatch at JDFPL for servicing DFIT’s obligation, RJIL, based on its binding undertaking with JDFPL, will extend funds for servicing the loans availed from DFIT in the form of advance fees to JDFPL and adjust these with future billing.

 

RJIL has a strong credit profile being India's largest telecom service provider by revenue market share. RJIL relies on JDFPL’s fibre infrastructure, and the latter is critical for the former’s ongoing operations. Furthermore, RJIL does not have the ability to cancel the FUA.

 

The receivables against the option agreements assigned to the trust are recoverable from obligors 2-5, which are entities forming part of the promoter group of RIL, holding substantial equity share in RIL, signifying strong market cover.  

 

Strong payment structure, along with waterfall mechanism, ensuring timely debt servicing 

The receivables will be credited by the obligors to the CPA on or at least one business day prior to the due date (T) to ensure timely payouts to the PTC holders. The stub loan receivables and assigned loan receivables from obligor 1 are aligned with payouts to PTC holders and will have a fixed interest and repayment schedule for the entire door-to-door tenure, mitigating the risk of mismatch in cash flow. Also, on exercise of the put option by the trust, the option counterparties shall deposit the consideration under the option agreements into the CPA on or 1 business day prior to the final repayment due date for the PTCs, which will be used by the trust for the redemption of the PTCs in full.

 

Weakness:

Exposure to market risk

Given the principal repayment of 80.80% to the PTC holders (based on agreed yield with the investors) will be met by obligors 2-5, financial flexibility of these obligors, in terms of available cover, depends on the prevailing market sentiment and share price of RIL. Increase in systemic risk or sharp decline in the share price of RIL are rating sensitivity factors. That said, the cover for these obligors was healthy, with market value of ~Rs 740,240 crore as on March 26, 2026, against the debt obligation arising out of the principal repayment of PTCs of Rs 6,463.72 crore (based on agreed yield with the investors).

Rating Sensitivity factors

Upward Factors: None

 

Downward Factors

•   Weakening of the credit quality of RJIL
•    Decline in the credit quality of the obligors
•     Non-adherence to the key transaction terms envisaged at the time of the rating

Liquidity: Strong

The liquidity is superior supported by the transaction structure involving DFIT and its subsidiary, JDFPL, and the credit profiles of the obligors 2-5.

Quality of the asset pool and strength of cashflows

The PTC investors are taking direct exposure to the repayment ability of obligor 1 in the pool for payment of stub loan receivables, assigned loan receivables against the PTCs and on obligors 2 to 5 for receivables under the assigned option agreements. Obligor 1 will be effectively servicing these obligations from loans extended to JDFPL. The revenue of JDFPL is backed by a 30-year FUA with RJIL, with ~25 years of contractual life remaining. RJIL has a strong credit risk profile and relies on JDFPL’s fibre infrastructure. Furthermore, RJIL does not have the ability to cancel the FUA.

 

For obligations by obligors 2-5, these entities are Reliance promoter group entities holding significant equity shares in RIL, signifying strong debt cover and thus supporting the credit risk profile.

Rating assumptions

Background:

Under the transaction structure, the trust has issued PTCs, the proceeds of which shall be payable to the originator, as a purchase consideration, against assignment of loan receivables and receivables under the option agreements over the term of the PTCs. The PTC investors are taking direct exposure to the ability of the obligors involved in the transaction structure to service the PTCs.

 

Assumptions:

• Crisil Ratings has considered quarterly interest and principal payouts and the recovery of the receivables under the option agreements from Obligors 2-5 at the end of the tenure of the PTCs.
• As per Crisil Ratings assessment, cash flow of the obligors will be sufficient to discharge their obligations to the trust.

About the company- Originator

SPTL has set up captive port facilities for receiving, handling, storing and evacuation of crude and petroleum/petrochemical products from the refineries and manufacturing facilities of RIL at Jamnagar. SPTL is a wholly owned subsidiary of Reliance Industries Holdings Pvt. Ltd., which belongs to the promoter group of RIL. SPTL handles almost entire crude oil import and petroleum and petrochemical export requirement of the two refineries of RIL at Jamnagar. The company has entered long-term throughput agreements with RIL for the two refineries. Apart from the port infrastructure facilities, SPTL owns a fleet of construction, heavy lift and earth-moving equipment, used for leasing/rendering services to its clients.

Quality and experience of servicer

The servicer is not applicable in this case because the obligors will be directly transferring the funds to the CPA under trust control.

 

A summary of key terms of servicer contract: NA

 

Provision for appointment of back-up servicer: NA

Risks and concerns for investors and mitigating factor

Crisil Ratings has adequately factored key risks in the transaction, including credit and market (as highlighted in rating assumptions section), counterparty and legal risks. The legal risks are assessed based on detailed analysis of transaction documentation. Risks factored from counterparties are mentioned in the table below:

Performance of outstanding rated transactions

Crisil Ratings has ratings outstanding on the PTCs issued by Siddhivinayak Securitisation Trust with an outstanding amount of Rs 7,890.91 crores. DFIT is realizing timely payments from JDFPL in line with the repayment schedule. Crisil Ratings is receiving monthly confirmations from the debenture trustee confirming that payments are being made timely in line with the repayment schedule.

Any other information: Not Applicable