4/5/2017 IndiaRatingsandResearchPrivateLimited:India'sMostRespectedCreditRatingandResearchAgency:IndiaRatingsDowngradesAnsalHousing&C

IndiaRatingsDowngradesAnsalHousing
&ConstructiontoINDBB/Negative&
MigratesRatingstoNonCooperating
Category
Home PressReleases IndiaRatingsDowngradesAnsalHousing&ConstructiontoIND
BB/Negative&MigratesRatingstoNonCooperatingCategory

ByAshishAgrawal
31 IndiaRatingsandResearch(IndRa)hasdowngradedAnsalHousing&
ConstructionLimiteds(AHCL)LongTermIssuerRatingtoINDBBfromIND
MAR2017
BBB.TheOutlookisNegative.Theratingactiontakesintoaccountthe
continuedstressonthecompanysearningsandliquidityprofileand
weakeneddebtmetricsinFY16,whichareexpectedtoremainunderpressure
intheshorttomediumterm.

Theratingshavebeenmigratedtononcooperatingcategory.Theissuerdidnotparticipateinthe
surveillanceexercisedespitecontinuousrequestsandfollowupsbytheagency.Thus,theratingis
onthebasisofbestavailableinformation.TheratingwillnowappearasINDBB(ISSUERNOT
COOPERATING)ontheagencyswebsite.Instrumentwiseratingactionsaregivenbelow:

Instrument Dateof Coupon Maturity Sizeof Rating/Outlook Rating

Type Issuance Rate Date Issue Action
(million)

Secured INR750 INDBB(ISSUERNOT Downgraded

overdraft COOPERATING)/Negative and
limits Migratedto
Non
Cooperating
Category

Nonfund INR716.3 INDA4+(ISSUERNOT Downgraded

basedlimits COOPERATING) and
Migratedto
Non
Cooperating
Category

Term INR1,400 INDtB(ISSUERNOT Downgraded

deposit COOPERATING)/Negative and
programme Migratedto
Non
Cooperating
Category

Note:ISSUERNOTCOOPERATING:IssuerdidnotcooperateBasedonbestavailableinformation

KEYRATINGDRIVERS

The downgrade reflects a significant decline in AHCLs consolidated revenue and EBITDA,
anddeterioration in credit metrics. Consolidated operating revenue plunged 39% yoy to INR4.86
billioninFY16andEBITDAdeclined19%yoytoINR1.07billionindicatingweakmarketsentiments
whichledtolowerofftakefromprojectsanddeclineincashinflows.Onastandalonebasis,revenue
slid to INR1.9 billion in 9MFY17 (9MFY16: INR3.2 billion) and EBITDA declined to INR431 million
(INR499million).IndRaexpectsAHCLsrevenueandEBITDAtoremainunderpressureintheshort
tomediumtermuntilanuptickisobservedinthemarketsentiments.
https://www.indiaratings.co.in/PressRelease?pressReleaseID=26890&title=IndiaRatingsDowngradesAnsalHousing%26Constructionto%E2%80%98IND 1/3
Net adjusted leverage (total adjusted net debt/operating EBITDAR) deteriorated to 5.9x in FY16
4/5/2017 IndiaRatingsandResearchPrivateLimited:India'sMostRespectedCreditRatingandResearchAgency:IndiaRatingsDowngradesAnsalHousing&C
(FY15:4.8x),drivenbyadeclineinoperatingprofit.Grossinterestcoveragealsodeclinedto1.0xin
FY16 (FY15: 1.3x) on account of higher financing expenses and lower EBITDA. On a standalone
basis, interest coverage ratio declined to 1.0x in 9MFY17 (9MFY16: 1.1x). The companys
consolidated debt stood at INR6,526 million at endFY16 (FY15: INR6,681 million). IndRa expects
the credit metrics to deteriorate further in the short term owing to a decline in cash inflows due to
continuedweakmarketscenario.

The downgrade also takes into account the increasing refinancing risk owing to significant debt
repayments over FY17FY20 (around INR2,531 million due in FY17) and weak cash inflows during
FY16FY17.IndRaexpectsAHCLscashinflowstobeinsufficienttomeetitsdebtobligationsdueto
subduedmarketconditionsandreducedcashflowexpectationsfromprojects.Hence,thecompany
willrelyonrefinancingtoavailfreshdebtuntilitwitnessesanimprovementincashflows.

The ratings, however, continue to be supported by AHCLs established brand name due to its
presence in the industry for over three decades and a track record of delivering real estate
developmentof76.6millionsfuntilFY15.

RATINGSENSITIVITIES

Negative:Continuedstressonearningsandliquidity,andinabilitytorefinancedebtcouldleadtoa
furtherratingdowngrade.

COMPANYPROFILE

Incorporatedin1983,AHCLoperatesarealestatebusinesswithakeyfocusonnorthernIndia.The
companyislistedontheBombayStockExchangeandNationalStockExchange.Thecompany
primarilyoperatesinDelhiNCR,MumbaiandTierIIandTierIIItownsandcommandsapremiumof
1015%overitslocalpeers.

RATINGHISTORY

InstrumentType CurrentRatings HistoricalRatings

RatingType Amount Rating 31December2015 13August2014 10October2013

Outstanding
(million)

Issuerrating Longterm INDBB(ISSUERNOTCOOPERATING)/Negative INDBBB/Stable INDBBB/Stable INDBB/Positive

Securedoverdraftlimits Longterm INR750 INDBB(ISSUERNOTCOOPERATING)/Negative INDBBB/Stable INDBBB INDBB

Nonfundbasedlimits Shortterm INR716.3 INDA4+(ISSUERNOTCOOPERATING) INDA3 INDA3 INDA4+

Termdepositprogramme Longterm INR1,400 INDtB(ISSUERNOTCOOPERATING/Negative INDtA/Stable INDtA

COMPLEXITYLEVELOFINSTRUMENTS

Bank facilities are instruments with low complexity levels, where the relationship between the
inherentriskfactorsandintrinsicreturncharacteristicsisstraightforward.

Formoreinformation,visitwww.indiaratings.co.in/complexityindicators.

SOLICITATIONDISCLOSURES

Additionalinformationisavailableatwww.indiaratings.co.in.Theratingsaboveweresolicitedby,or
onbehalfof,theissuer,andtherefore,IndiaRatingshasbeencompensatedfortheprovisionofthe
ratings.

Ratingsarenotarecommendationorsuggestion,directlyorindirectly,toyouoranyotherperson,
https://www.indiaratings.co.in/PressRelease?pressReleaseID=26890&title=IndiaRatingsDowngradesAnsalHousing%26Constructionto%E2%80%98IND 2/3
tobuy,sell,makeorholdanyinvestment,loanorsecurityortoundertakeanyinvestmentstrategy
4/5/2017 IndiaRatingsandResearchPrivateLimited:India'sMostRespectedCreditRatingandResearchAgency:IndiaRatingsDowngradesAnsalHousing&C
withrespecttoanyinvestment,loanorsecurityoranyissuer.

ABOUTINDIARATINGSANDRESEARCH

India Ratings and Research (IndRa) is India's most respected credit rating agency committed to
providing India's credit markets accurate, timely and prospective credit opinions. Built on a
foundationofindependentthinking,rigorousanalytics,andanopenandbalancedapproachtowards
creditresearch,IndRahasgrownrapidlyduringthepastdecade,gainingsignificantmarketpresence
inIndia'sfixedincomemarket.

IndRa currently maintains coverage of corporate issuers, financial institutions (including banks and
insurance companies), finance and leasing companies, managed funds, urban local bodies and
projectfinancecompanies.

HeadquarteredinMumbai,IndRahassixbranchofficeslocatedinAhmedabad,Bengaluru,Chennai,
Delhi, Hyderabad and Kolkata. IndRa is recognised by the Securities and Exchange Board of India,
theReserveBankofIndiaandNationalHousingBank.

IndiaRatingsisa100%ownedsubsidiaryoftheFitchGroup.

Formoreinformation,visitwww.indiaratings.co.in.

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DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS
LINK: HTTPS://WWW.INDIARATINGS.CO.IN/RATINGDEFINITIONS. IN ADDITION, RATING
DEFINITIONSANDTHETERMSOFUSEOFSUCHRATINGSAREAVAILABLEONTHEAGENCY'SPUBLIC
WEBSITE WWW.INDIARATINGS.CO.IN. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE
AVAILABLEFROMTHISSITEATALLTIMES.INDIARATINGSCODEOFCONDUCT,CONFIDENTIALITY,
CONFLICTSOFINTEREST,AFFILIATEFIREWALL,COMPLIANCE,ANDOTHERRELEVANTPOLICIESAND
PROCEDURESAREALSOAVAILABLEFROMTHECODEOFCONDUCTSECTIONOFTHISSITE.

https://www.indiaratings.co.in/PressRelease?pressReleaseID=26890&title=IndiaRatingsDowngradesAnsalHousing%26Constructionto%E2%80%98IND 3/3