Brickwork Ratings reaffirms the ratings for the Bank Loan Facilities of Rs. 1200.00 Crs. of GHV (India) Pvt. Ltd.
Particulars| Facilities** | Amount (Rs.Crs.) | Tenure | Rating# | ||
|---|---|---|---|---|---|
| Previous | Present | Previous (07 May 2021) |
Present | ||
| Fund Based | 291.00 | 216.00 | Long Term |
BWR A+/Stable
Reaffirmation |
BWR A +
/Stable Reaffirmation |
| Non Fund Based | 909.00 | 984.00 | Short Term |
BWR A1
Reaffirmation |
BWR A1
Reaffirmation |
| Grand Total | 1200.00 | 1200.00 | (Rupees One Thousand Two Hundred Crores Only) | ||
BWR reaffirms the rating of the bank loan facilities of GHV India Pvt. Ltd.
Reaffirmation of rating follows strength from the experience of the promoters in the Engineering, Procurement and Construction (EPC) business with an established track record, improvement in operating performance in FY22 after the covid backed slowdown in FY21, comfortable capital structure, reputed clientele, and good order book position which gives revenue visibility in the medium term. with strong counterparties - 90% of the revenue of the company is derived road sector and 95% of the order book is from Central Government.
The ratings continue to be constrained by risks relating to tender-based operations, presence in a highly competitive industry, the vulnerability of operations to delays in project execution, and risks of timely receipt of receivables as contract orders are from Government departments/entities.
The stable outlook indicates that BWR expects the Company to sustain the current performance in medium term based on the track record of performance and current order book position
KEY RATING DRIVERSCredit Strengths:
The Company has a proven execution track record over the years which is resulted in growth in order book position. The current order book position of ~Rs. 8937.89 Cr of which Rs. 2606.63 Cr is executed and balance is expected to be executed in the next two years. 90% of the orders relate to the Road project with 95% of the order book from Central Government and 5% from State Government.
The tender based business leads to volatility in order book and hence revenue and profitability of the Company. Further the construction industry is highly fragmented with many organised and unorganised players. The Company is exposed to the risks inherent in the construction sector including slowdown in new order inflows, risks of delays in execution etc.
The Company executes work orders mostly for state govt and Central govt. NHAI etc. The company remains exposed to the risk of delayed payments, hence timely receipts of receivables from the clients for the executed work is key credit risk for the rating. The fund based working capital utilization was at 75-80% of the limit for the past few months. Receivable days were moderate at 80 days as on 31 March 2021, which is constant since past three years.
The company is rated on a stand-alone basis taking into account the Corporate Guarantees provided to the SPVs. For arriving at its ratings, BWR has applied its rating methodology as detailed in the Rating Criteria detailed below (hyperlinks provided at the end of this rationale).
RATING SENSITIVITIES
Positive: Increase in revenue and profitability with efficient management of working capital cycle will be credit positive.
Negative: Deterioration in revenue and profitability and tightening of working capital cycle will be credit negative.
LIQUIDITY INDICATORS - Adequate
As per provisional financials for March 31, 2022, the company had cash and cash equivalent of Rs. 48.83 Cr and along with unused bank lines of Rs.130 Cr. This is considered to be adequate considering the debt maturities of Rs.39.33 Cr in FY23. With the demonstrated track record of timely availability of mobilization advances and timely recovery of receivables from NHAI, the Company is able to maintain an adequate liquidity position
ABOUT THE ENTITY
GHV India Pvt. Ltd. (GHV) was established as a partnership firm in 1965 under the name “G H Vijapura & Company”, by Mr. G Vijapura. The firm was later reconstituted as a private limited company under the name “GHV (India) Pvt. Ltd. in 2009. The Company is promoted by Mr. Jahid Vijapura and his brothers (second generation) – Mr. Faruk Vijapura and Mr. Mustakali Vijapura, all of whom have more than two decades of experience in the industry.
The Company is Engineering, Procurement and Construction (EPC) contractor and has undertaken construction projects in the area of roads, urban development, airports runway / parking construction / reconstruction for the State and Central Government as well as private players. It has an active presence across the country and is spreading its reach far and wide with its expertise and experience in infrastructure thereby shaping the future of the Infrastructure Industry. The Company has its registered office in Mumbai and having its Branch in Gujarat and having projects in Maharashtra, Kerala, Madhya Pradesh, Gujarat, Rajasthan, Karnataka, Himachal Pradesh , Assam and Bihar.
At present, GHV has three SPVs - Ahmednagar Bypass Road Project Pvt. Ltd. (BWR A- (CE) (Stable), Ahmednagar Ghogargaon Road Projects Pvt. Ltd. (BWR A- (CE) (Stable) / A2+ (CE)) and Ujjain Garoth Road Project Pvt. Ltd.
KEY FINANCIAL INDICATORS (Standalone)| Key Parameters | Units |
FY 20-21 (Audited) |
FY 19-20 (Audited) |
|---|---|---|---|
| Operating Revenue | Rs.Crs. | 905.99 | 907.04 |
| EBITDA | Rs.Crs. | 119.27 | 121.12 |
| PAT | Rs.Crs. | 39.99 | 38.66 |
| Tangible Net Worth | Rs.Crs. | 308.13 | 261.09 |
| Total Debt/TNW | Times | 0.44 | 0.64 |
| Current Ratio | Times | 1.56 | 1.26 |
| Key Parameters | Units |
FY 20-21 (Audited) |
FY 19-20 (Audited) |
|---|---|---|---|
| Operating Revenue | Rs.Crs. | 1125.85 | 1113.09 |
| EBITDA | Rs.Crs. | 118.67 | 121.53 |
| PAT | Rs.Crs. | 39.24 | 38.68 |
| Tangible Net Worth | Rs.Crs. | 315.52 | 270.43 |
| Total Debt/TNW | Times | 0.43 | 0.62 |
| Current Ratio | Times | 1.49 | 1.27 |
| Facilities | Current Rating (2022) | 2021 | 2020 | 2019 | |||||
|---|---|---|---|---|---|---|---|---|---|
| Type | Tenure | Amount (Rs.Crs.) |
Rating | Date | Rating | Date | Rating | Date | Rating |
| Fund Based | LT | 216.00 |
BWR A+/Stable
(Reaffirmation) |
07May2021 |
BWR A+Stable
(Reaffirmation) |
04May2020 |
BWR A+Stable
(Reaffirmation) |
22Apr2019 |
BWR A+Stable
(Assignment) |
| Non Fund Based | ST | 984.00 |
BWR A1
(Reaffirmation) |
07May2021 |
BWR A1
(Reaffirmation) |
04May2020 |
BWR A1
(Reaffirmation) |
22Apr2019 |
BWR A1
(Assignment) |
| Grand Total | 1200.00 | (Rupees One Thousand Two Hundred Crores Only) | |||||||
BWR complexity levels are meant for educating investors. The BWR complexity levels are available at www.brickworkratings.com / download / ComplexityLevels.pdf. Investors queries can be sent to info@brickworkratings.com.
Hyperlink/Reference to applicable Criteria| Analytical Contacts | |
|---|---|
|
Forum Rushit Parekh Manager - Ratings Board : +91 22 2831 1426, +91 22 2831 1439 forum.rp@brickworkratings.com |
Vidya Shankar Principal Director - Ratings Board : +91 80 4040 9940 vidyashankar@brickworkratings.com |
| 1-860-425-2742 | media@brickworkratings.com | |
| SL.No. | Name of the Bank/Lender | Type Of Facilities | Long Term(Rs.Crs.) | Short Term(Rs.Crs.) | Total(Rs.Crs.) | |
|---|---|---|---|---|---|---|
| 1 | Bank of Baroda | Cash CreditSanctioned | 58.00 | _ | 58.00 | |
| 2 | Bank of Baroda | Bank GuaranteeSanctioned | _ | 245.00 | 245.00 | |
| 3 | Canara Bank | Cash CreditSanctioned | 20.00 | _ | 20.00 | |
| 4 | Canara Bank | Bank GuaranteeSanctioned | _ | 95.00 | 95.00 | |
| 5 | Others | Bank GuaranteeProposed | _ | 336.00 | 336.00 | |
| 6 | Others | Cash CreditProposed | 76.00 | _ | 76.00 | |
| 7 | Punjab National Bank | Cash CreditSanctioned | 24.00 | _ | 24.00 | |
| 8 | Punjab National Bank | Bank GuaranteeSanctioned | _ | 164.00 | 164.00 | |
| 9 | State Bank Of India (SBI) | Cash CreditSanctioned | 20.00 | _ | 20.00 | |
| 10 | State Bank Of India (SBI) | Bank GuaranteeSanctioned | _ | 64.00 | 64.00 | |
| 11 | Union Bank of India | Bank GuaranteeSanctioned | _ | 80.00 | 80.00 | |
| 12 | Union Bank of India | Cash CreditSanctioned | 18.00 | _ | 18.00 | |
| Total | 216.00 | 984.00 | 1200.00 | |||
| TOTAL (Rupees One Thousand Two Hundred Crores Only) | ||||||
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