Rating Rationale
February 27, 2025 | Mumbai
TCG Urban Infrastructure Holdings Private Limited
Rating reaffirmed at 'Crisil BBB/Stable'
 
Rating Action
Total Bank Loan Facilities RatedRs.676 Crore
Long Term RatingCrisil BBB/Stable (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 & Bank Facilities

Detailed Rationale

Crisil Ratings has reaffirmed its 'Crisil BBB/Stable' rating on the long-term bank loan facilities of TCG Urban Infrastructure Holdings Private Limited (TCGUIH; a part of the TCG group).

 

The rating continues to reflect the established market position of The Chatterjee Group (TCG) in the commercial real estate business and strong financial flexibility of the promoters. The rating also factors in strong tenant profile, steady cash flow through lease rental, favorable location of the properties, and adequate cash flow to meet maturing debt. These rating strengths are partially offset by cyclicality in the commercial real estate market and exposure to timely leasing of vacant space at adequate rates.

Analytical Approach

For arriving at the rating, Crisil Ratings has consolidated the cash flow of TCGUIH, Bengal Intelligent Parks Pvt Ltd (BIPPL; Rated: Crisil BBB/Stable) and TCG Facilities Management Services Pvt Ltd (TCG FMS; Rated: Crisil BBB/Stable) because the entities, collectively, referred to as the TCG group, have common customer base (for BIP, Kolkata property), fungible cash flow and are under the same management.

 

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

Key Rating Drivers & Detailed Description

Strengths:

  • Established market position of the group and strong financial flexibility of the promoters: TCG is engaged in diverse businesses such as petrochemicals, life sciences, technology, and financial services, apart from real estate. Dr. Purnendu Chatterjee, the TCG's founder, owns the real estate platform through TCGUIH. The group owns real estate in Bengaluru (Karnataka), Pune, Mumbai (Maharashtra), Kolkata (West Bengal), and Gurugram (Haryana). Furthermore, the promoters' strong financial flexibility is demonstrated by the prior need-based funding support.

 

  • Strong tenant profile: Reputable and well-established tenants, such as consulates, banking, financial services and insurance (BFSI), information technology (IT) and IT-enabled services, and petrochemical industries, are housed in the group's commercial assets. The majority of tenants have long-term agreements, which offer consistent and robust cash flow visibility throughout the medium term. A few of these tenants have made investments in their fit-out, indicating that they plan to extend their lease. Also, leases that include lock-in help to reduce the danger of a tenant leaving.

 

  • Favorable location of the properties, and adequate cash flow to meet maturing debt: The Group’s assets are well-positioned in established and emerging commercial business areas, making them a favored choice for international corporations and Indian corporate houses. The finished office properties of the Group are well connected by road. Additionally, this bodes good for the market for commercial properties where rental rates have been maintained. Further, occupancy across assets is on improving trend with letter of intents (LOI) from the new tenants along with renewal of existing ones. Group’s cash flows would remain sufficient against debt servicing obligations, with minimum debt service coverage ratio remaining above 1.2 times over the medium term. The group is also dedicated to maintaining cash and cash equivalent for at least three months' worth of debt servicing obligations.

 

Weaknesses:

  • Exposure to cyclicality in the commercial real estate market: The domestic real estate sector is cyclical in nature, given the volatility in prices, opaque transactions, and the highly fragmented market structure, owing to presence of several regional players. Additionally, commercial properties are prone to premature termination of rental leases during an economic slowdown; fresh lease agreements signed during such phases are also lower in value.

 

  • Exposure to timely leasing of vacant space at adequate rates: In May 2022, occupancy at BIP Kolkata moderated to 65%, due to exit of Cognizant (anchor tenant). Subsequently, the occupancy of BIP Kolkata improved to ~93% as on date. Other group properties including TCG Financial Centre (TCG FC) at Mumbai and TCG First India Place (TCG FIP) at Gurgaon are expected to maintain healthy occupancy levels with tenants paying rent as per agreed escalations. Crisil Ratings shall continue to monitor the renewal of tenants, addition of prospective tenants, any large significant tenant action and liquidity maintained in each company.

Liquidity: Adequate

Liquidity is adequate, driven by average DSCR of greater than ~1.3 times. However, the DSCR is expected to improve due to incremental leasing to new tenants. Group maintains at least three months of debt repayment obligations in form of cash and cash equivalent to cushion any cash flow mismatch that arises during monthly rental collections for all the loans.

Further, any major shortfall will be funded through promoters’ financial support as and when required.

Outlook: Stable

Crisil Ratings believes TCG group will continue to benefit from its established market position in the commercial real estate business, steady cash flows from properties, and the strong financial flexibility of its promoters

Rating sensitivity factors

Upward factors:

  • Substantial increase in rental income while maintaining costs, thereby strengthening surplus generation and DSCR.
  • Improvement and sustenance in occupancy above 85% on average across properties leading to improvement in DSCR.

 

Downward factors:

  • Existing tenants vacating the leased space leading to decrease in minimum DSCR below 1 time for near term.
  • Incremental debt on existing lease rentals, stretching DSCR and reduction in surplus liquidity.

About the Group

TCGUIH, incorporated in 1981, is a part of the TCG group, promoted by Dr Purnendu Chatterjee and is the holding company for the group's real estate ventures. The company acts as a real estate developer and investment company, and is engaged in development, construction, and leasing and sale of commercial properties in India; it also provides consultancy services.

 

The company has two commercial leased properties: TCG FC at Mumbai (1.82 lacs sq ft) and FIP Gurgaon (37,000 sq ft). Post-merger of TCGUIH’s wholly owned subsidiary, Boulevard Services Private Limited (BSPL) in 2022 with TCGUIH, it also leases fit-out at two properties: BIP and First Technology Place (Bengaluru).

 

BIPPL, incorporated in 1997 as a subsidiary of TCGUIH, owns and has leased the BIP, Kolkata property which is of 9.2 lakh square feet. Overall, the group has commercial office space leased out to the extent of 23.17 Lakh Sq ft across 6 properties.

 

TCG FMS, incorporated in 1999, is a wholly owned subsidiary of TCGUIH and is TCG group's maintenance and facility management arm. Presently, TCG FMS offers its services for the group's properties at BIP, FTP and TCG FC.

Key Financial Indicators

TCGUIH

 

 

 

As on / for the period ended March 31

 

2024

2023

Operating income

Rs crore

104.72

81.93

Reported profit after tax

Rs crore

27.23

19.86

PAT margins

%

26.01

24.25

Adjusted Debt/Adjusted Net worth

Times

3.01

2.83

Interest coverage

Times

1.77

1.88

 

Any other information: Not Applicable

Note on complexity levels of the rated instrument:
Crisil Ratings` complexity levels are assigned to various types of financial instruments and are included (where applicable) in the 'Annexure - Details of Instrument' in this Rating Rationale.

Crisil Ratings will disclose complexity level for all securities - including those that are yet to be placed - based on available information. The complexity level for instruments may be updated, where required, in the rating rationale published subsequent to the issuance of the instrument when details on such features are available.

For more details on the Crisil Ratings` complexity levels please visit www.crisilratings.com. Users may also call the Customer Service Helpdesk with queries on specific instruments.

Annexure - Details of Instrument(s)

ISIN Name Of Instrument Date Of Allotment Coupon Rate (%) Maturity Date Issue Size (Rs. Crore) Complexity Levels Rating Outstanding with Outlook
NA Overdraft Facility NA NA NA 3.00 NA Crisil BBB/Stable
NA Lease Rental Discounting Loan NA NA 30-Nov-33 120.00 NA Crisil BBB/Stable
NA Lease Rental Discounting Loan NA NA 30-Nov-33 465.00 NA Crisil BBB/Stable
NA Lease Rental Discounting Loan NA NA 30-Nov-33 28.00 NA Crisil BBB/Stable
NA Lease Rental Discounting Loan NA NA 30-Nov-33 60.00 NA Crisil BBB/Stable

 

Annexure – List of entities consolidated

Names of Entities Consolidated

Extent of Consolidation

Rationale for Consolidation

TCG Urban Infrastructure Holdings Private Limited

Full

Business linkages

Bengal Intelligent Parks Private Limited

Full

Business linkages

TCG Facilities Management Services Private Limited

Full

Business linkages

 

Annexure - Rating History for last 3 Years
  Current 2025 (History) 2024  2023  2022  Start of 2022
Instrument Type Outstanding Amount Rating Date Rating Date Rating Date Rating Date Rating Rating
Fund Based Facilities LT 676.0 Crisil BBB/Stable   --   -- 01-12-23 Crisil BBB/Stable 07-07-22 Crisil BBB/Stable Crisil BBB/Stable
      --   --   -- 21-03-23 Crisil BBB/Stable   -- --
All amounts are in Rs.Cr.
Annexure - Details of Bank Lenders & Facilities
Facility Amount (Rs.Crore) Name of Lender Rating
Lease Rental Discounting Loan 120 The Saraswat Co-Operative Bank Limited Crisil BBB/Stable
Lease Rental Discounting Loan 465 Union Bank of India Crisil BBB/Stable
Lease Rental Discounting Loan 28 The Saraswat Co-Operative Bank Limited Crisil BBB/Stable
Lease Rental Discounting Loan 60 Union Bank of India Crisil BBB/Stable
Overdraft Facility 3 The Saraswat Co-Operative Bank Limited Crisil BBB/Stable
Criteria Details
Links to related criteria
Basics of Ratings (including default recognition, assessing information adequacy)
Criteria for consolidation

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