Rating Rationale
Reliance Innoventures Pvt Ltd.
10 Aug 2018
Brickwork Ratings revised the rating for the Non-Convertible Debentures Issue of Rs. 350 crs and Bank facilities of Rs. 250 crs of Reliance Innoventures Pvt Ltd.
Instrumen Amount Coup ISIN Current Previous Issue Maturity t (Rs. Crs) on Particulars Rating* Rating Date Date
BWR AA- (Pronounced BWR AA BWR Double (Pronounced 12 INE045I0701 A Minus) BWR Double NCD Jan 350.00 11% 29-Jun-2021 7 Credit Watch A) 2015 with Outlook- Developing Stable implications Particulars *Please refer to BWR website www.brickworkratings.com/ for definition of the ratings
BWR also revised rating of other instruments as per below table.
Amount Facility Rated Tenure Rating * (Rs. Crs) Previous Present Current Previous BWR AA- Fund Based (Pronounced BWR AA BWR Double A (Pronounced Term Loan- Minus) 250.00 Long Term BWR Double A) Yes Bank 250.00 Credit Watch Outlook- Stable with Developing implications Rs. 250 Crores Total (Rupees Two Hundred and Fifty Crores Only.)
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BWR has essentially relied upon audited standalone financial results upto FY17, Provisional Financials of FY18 and publicly available information and information/clarification provided by the Company
Rationale/Description of Key Rating Drivers/Rating sensitivities:
The rating revision factors deterioration in financial risk profile of Reliance Infrastructure Limited one of the group companies in which RIPL have substantial holdings directly and indirectly.
The rating continues to factor, inter alia, strategic importance of RIPL being the ultimate holding company of Reliance Anil Dhirubhai Ambani Group (ADAG), strong management and substantial holdings in group’s listed companies through intermediate holding companies, and high financial flexibility. . The rating is however constrained by RIPL’s limited revenue stream and dependence on the promoter funding or refinance to meet the debt obligations
Constrained financial flexibility of RIPL on account of fluctuations in value of investments and ability to refinance the debt which is due in near term will be key rating sensitivities.
Rating Outlook Rating watch with developing implications is mainly on account of completion of sale of Mumbai GTD business by R-Infra to Adani, the company is expected to complete the deal by end of August 2018 which may improve the overall financial profile of R-Infra. Any further delay in completion of deal may lead to further rating action.
Key terms of Bank Loan & NCD’s The Company has been sanctioned Term loan of Rs. 250 Cr & NCD’s of Rs. 350 Cr utilized for refinance of loans availed, meeting capital expenditure in form of wind mill assets, on lending to infrastructure subsidiaries/group companies in the form of ICD/sub debt or refinance promoter loans used for such purpose and others. The loan has bullet repayment on maturity. However, interest on the loan will be payable monthly and interest on NCDs are payable annually. The bank loan and NCDs are backed by way of pari passu charge on windmill/tangible assets/trade receivables/inventory/loans and advances both present and future of the Borrower, such that a security cover of at least 1x of outstanding amount under loan at all times. Further the bank loan is secured by pledge (First Charge) and NCDs are secured by Pledge (Second charge) over equity shares of Reliance Infrastructure Limited and Reliance Communications Limited
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About the Company Reliance Innoventures Private Limited (RIPL) is the ultimate holding company of Reliance-Anil Dhirubhai Ambani Group (ADAG). It has strategic holdings in various listed operating group companies through intermediate holding companies. The Company holds majority of the promoter shareholding in Reliance Capital Ltd (Rated BWR AAA), Reliance Power Ltd., Reliance Infrastructure Ltd.(BWR AA-) & Reliance Communications Limited among other Reliance ADAG Group Companies, directly and through subsidiaries. RIPL also undertakes sale of wind power and EPC contracts for small projects. RIPL is held by Mr. Anil Ambani, Mrs. Kokilaben D Ambani and other family members. Mr. Anil Ambani, Mrs. Tina Ambani and Mr. Sunil Kakani are among the directors on the board of the Company. Company Financial Performance As per Audited financials of FY17 RIPL recorded total income of Rs. 42.43 Crs compared to Rs. 31.44 Crs in FY16 and net loss of Rs. 31.90 Crs compared to net loss of Rs. 63.90 Crs in FY16. Key Financial Indicators
Particulars (Amt in Rs. 2017 (Audited) 2016 (Audited) Crs) Total Operating Income 42.43 31.44 EBITDA 29.36 23.60 PAT -31.90 -63.90 Total Networth 10028 10060 Rating History for the last three years (including withdrawn/suspended ratings)
Sl. Instrumen Current Rating (Year 2018) Rating History No. t/Facility Type (Long Amount May-2016 Rating June 2018 June 2017 Term/Short (Rs Crs) Term) BWR AA- BWR AA 1 NCD Long term 350 (Pronounced Outlook-Stabl BWR Double e BWR AA A Minus) BWR AA Outlook-Stab Long Credit Watch Outlook-Stable le 2 BLR 250 Term With Developing implication
Total 600
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Status of non-cooperation with previous CRA (if applicable)-NA Any other information
Hyperlink/Reference to applicable Criteria
● General Criteria
● Approach to Financial Ratios
● Infrastructure Sector
For any other criteria to be hyperlinks from website to be taken
Analytical Contacts Media
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About Brickwork Ratings Brickwork Ratings (BWR), a SEBI registered Credit Rating Agency, accredited by RBI and empaneled by NSIC, offers Bank Loan, NCD, Commercial Paper, MSME ratings and grading services. NABARD has empaneled Brickwork for MFI and NGO grading. BWR is accredited by IREDA & the Ministry of New and Renewable Energy (MNRE), Government of India. Brickwork Ratings has Canara Bank, a leading public sector bank, as its promoter and strategic partner. BWR has its corporate office in Bengaluru and a country-wide presence with its offices in
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Ahmedabad, Chandigarh, Chennai, Hyderabad, Kolkata, Mumbai and New Delhi along with representatives in 150+ locations. BWR has rated debt instruments/bonds/bank loans, securitized paper of over ₹ 11,99,663 Cr. In addition, BWR has rated over 6819 MSMEs. Also, Fixed Deposits and Commercial Papers etc. worth over ₹48,803 Cr have been rated.
BWR has rated over 30 PSUs/Public Sector banks, as well as many major private players. BWR has a major presence in ULB rating of nearly 102 cities
DISCLAIMER Brickwork Ratings (BWR) has assigned the rating based on the information obtained from the issuer and other reliable sources, which are deemed to be accurate. BWR has taken considerable steps to avoid any data distortion;however, it does not examine the precision or completeness of the information obtained. And hence, the information in this report is presented “as is” without any express or implied warranty of any kind. BWR does not make any representation in respect to the truth or accuracy of any such information. The rating assigned by BWR should be treated as an opinion rather than a recommendation to buy, sell or hold the rated instrument and BWR shall not be liable for any losses incurred by users from any use of this report or its contents. BWR has the right to change, suspend or withdraw the ratings at any time for any reasons.
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