Press Release

White Pearls Hotels and Investments Private Limited April 03, 2018

Rating

Facilities Amount (Rs. crore) Rating1 Rating Action

CARE B+; Stable Long term Bank Facilities 15.00 Reaffirmed (Single B Plus; Outlook: Stable) 15.00 Total Facilities (Rupees Fifteen crore only) Details of instruments/facilities in Annexure I

Detailed Rationale & Key Rating Drivers The rating assigned to the bank facilities of White Pearls Hotels and Investments Private Limited (WHIPL) continues to be constrained by its modest scale of operations, leveraged capital structure and weak debt protection metrics. The rating further continues to be constrained by investment in loss-making subsidiaries and its presence in the highly competitive and fragmented industry with demand linkage from the cyclical real estate sector. The rating continues to derive strength from experience and resourcefulness of the promoters in hospitality and real estate leasing business, WHIPL’s long track record and location advantage of its hotel and real estate properties and healthy profit margins. Going forward, the company’s ability to timely receive the lease rentals and maintain occupancy in both hospitality and lease rental business amidst increasing competition along with any further investment in the loss making subsidiaries are the key rating sensitivities. Detailed description of the key rating drivers Key Rating Weaknesses Modest scale of operations: The scale of operations WHIPL stood modest as indicated by its total operating income of Rs.12.58 crore and gross cash accruals of Rs.3.07 crore. Further the net-worth also stood at Rs.17.13 crore as on March 31, 2017. This thereby has limited financial flexibility of the company. Leveraged capital structure and moderate debt coverage indicators: WHIPL’s capital structure continues to remain moderately leveraged due to high reliance on external borrowings to fund working capital requirements coupled with its low net-worth base. Investment in subsidiaries: The company has invested in equity share capital of various group companies engaged into business of buying and leasing out real estate. Furthermore, WHIPL has also given unsecured loans to group companies which do not have a fixed repayment schedule. Key Rating Strengths Experienced and resourceful promoters: The day to day operations of the company are handled by Mr. Manish Doshi who has over two decades of experience in the hospitality industry. Furthermore, Mr. (Director) is the president of for and currently represents the Shivaji Nagar of Suburban District in the Maharashtra Legislative Assembly. Healthy profit margins: The profit margins of the company have remained comfortable due to minimal running costs with majority revenue coming from property rentals. Its PBILDT margin was high and in the range of 41%-50% during last three years ending FY17. Analytical Approach - Standalone Applicable Criteria Criteria on assigning Outlook to Credit Ratings CARE’s Policy on Default Recognition Rating Methodology - Service Sector Companies

1Complete definition of the ratings assigned are available at www.careratings.com and other CARE publications.

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Financial ratios – Non-Financial Sector

About the company White Pearls Hotels & Investments Private Limited (WPHI) was incorporated in 1983 by Mr. Ganesh Kumar Gupta and late Mr. Dilkhush Doshi. As on November 1, 2014, WPHI owns & operates a budget hotel of 22 air-conditioned rooms at Colaba, Mumbai (the company has reduced the rooms from 43 in FY13; as the area of the remaining rooms have been given on lease) located near the Gateway of India which is a prime tourist destination in Mumbai and attracts foreign tourists. The hotel also has tie-ups with corporate clients who book multiple rooms for a period of one to three months. Besides the hotel business, WPHI also invests in real estate business wherein it buys residential and commercial properties (properties mainly located in South Mumbai, Bandra, Khar Road and other suburbs in Mumbai) and leases them out. During FY17 (refers to the period April 1 to March 31), the company reported total operating income of Rs.12.58 crore (vis-a-vis Rs.12.93 crore during FY16) and PAT of Rs.2.91 crore (vis-a-vis Rs.2.87 crore during FY16).

Brief Financials (Rs. crore) FY16 (A) FY17 (A) Total operating income 12.93 12.58 PBILDT 6.24 6.19 PAT 2.87 2.91 Overall gearing (times) 1.36 1.07 Interest coverage (times) 3.62 3.77

A: Audited

Status of non-cooperation with previous CRA: Not Applicable

Any other information: Not applicable

Rating History (Last three years): Please refer Annexure-2 Note on complexity levels of the rated instrument: CARE has classified instruments rated by it on the basis of complexity. This classification is available at www.careratings.com. Investors/market intermediaries/regulators or others are welcome to write to [email protected] for any clarifications.

Analyst Contact Name: Mr. Ruchi Shroff Tel: 022-67543554 Email: [email protected]

**For detailed Rationale Report and subscription information, please contact us at www.careratings.com

About CARE Ratings: CARE Ratings commenced operations in April 1993 and over nearly two decades, it has established itself as one of the leading credit rating agencies in India. CARE is registered with the Securities and Exchange Board of India (SEBI) and also recognized as an External Credit Assessment Institution (ECAI) by the Reserve Bank of India (RBI). CARE Ratings is proud of its rightful place in the Indian capital market built around investor confidence. CARE Ratings provides the entire spectrum of credit rating that helps the corporates to raise capital for their various requirements and assists the investors to form an informed investment decision based on the credit risk and their own risk-return expectations. Our rating and grading service offerings leverage our domain and analytical expertise backed by the methodologies congruent with the international best practices.

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Disclaimer CARE’s ratings are opinions on credit quality and are not recommendations to sanction, renew, disburse or recall the concerned bank facilities or to buy, sell or hold any security. CARE has based its ratings/outlooks on information obtained from sources believed by it to be accurate and reliable. CARE does not, however, guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. Most entities whose bank facilities/instruments are rated by CARE have paid a credit rating fee, based on the amount and type of bank facilities/instruments. In case of partnership/proprietary concerns, the rating assigned by CARE is based on the capital deployed by the partners/proprietor and the financial strength of the firm at present. The rating/outlook may undergo change in case of withdrawal of capital or the unsecured loans brought in by the partners/proprietor in addition to the financial performance and other relevant factors.

Annexure-1: Details of Instruments/Facilities

Name of the Date of Coupon Maturity Size of the Rating assigned Instrument Issuance Rate Date Issue along with Rating (Rs. crore) Outlook Fund-based - LT-Bank - - - 15.00 CARE B+; Stable Overdraft

Annexure-2: Rating History of last three years

Sr. Name of the Current Ratings Rating history No. Instrument/Bank Type Amount Rating Date(s) & Date(s) & Date(s) & Date(s) & Facilities Outstanding Rating(s) Rating(s) Rating(s) Rating(s) (Rs. crore) assigned in assigned in assigned in assigned in 2017-2018 2016-2017 2015-2016 2014-2015 1. Fund-based - LT-Bank LT 15.00 CARE B+; - 1)CARE B+; 1)CARE B+ 1)CARE B Overdraft Stable Stable (14-Dec-15) (09-Dec-14) (16-Mar-17)

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CONTACT Head Office Mumbai

Ms. Meenal Sikchi Mr. Ankur Sachdeva Cell: + 91 98190 09839 Cell: + 91 98196 98985 E-mail: [email protected] E-mail: [email protected]

Ms. Rashmi Narvankar Mr. Saikat Roy Cell: + 91 99675 70636 Cell: + 91 98209 98779 E-mail: [email protected] E-mail: [email protected] CARE Ratings Limited (Formerly known as Credit Analysis & Research Ltd.) Corporate Office: 4th Floor, Godrej Coliseum, Somaiya Hospital Road, Off Eastern Express Highway, Sion (East), Mumbai - 400 022 Tel: +91-22-6754 3456 | Fax: +91-22-6754 3457 | E-mail: [email protected]

AHMEDABAD Mr. Deepak Prajapati JAIPUR 32, Titanium, Prahaladnagar Corporate Road, Mr. Nikhil Soni Satellite, Ahmedabad - 380 015 304, Pashupati Akshat Heights, Plot No. D-91, Cell: +91-9099028864 Madho Singh Road, Near Collectorate Circle, Tel: +91-79-4026 5656 Bani Park, Jaipur - 302 016. E-mail: [email protected] Cell: +91 – 95490 33222 Tel: +91-141-402 0213 / 14 BENGALURU E-mail: [email protected] Mr. V Pradeep Kumar Unit No. 1101-1102, 11th Floor, Prestige Meridian II, KOLKATA No. 30, M.G. Road, Bangalore - 560 001. Ms. Priti Agarwal Cell: +91 98407 54521 3rd Floor, Prasad Chambers, (Shagun Mall Bldg.) Tel: +91-80-4115 0445, 4165 4529 10A, Shakespeare Sarani, Kolkata - 700 071. Email: [email protected] Cell: +91-98319 67110 Tel: +91-33- 4018 1600 CHANDIGARH E-mail: [email protected] Mr. Anand Jha SCF No. 54-55, NEW DELHI First Floor, Phase 11, Ms. Swati Agrawal Sector 65, Mohali - 160062 13th Floor, E-1 Block, Videocon Tower, Chandigarh Jhandewalan Extension, New Delhi - 110 055. Cell: +91 85111-53511/99251-42264 Cell: +91-98117 45677 Tel: +91- 0172-490-4000/01 Tel: +91-11-4533 3200 E-mail: [email protected] Email: [email protected]

CHENNAI PUNE Mr. V Pradeep Kumar Mr.Pratim Banerjee Unit No. O-509/C, Spencer Plaza, 5th Floor, 9th Floor, Pride Kumar Senate, No. 769, Anna Salai, Chennai - 600 002. Plot No. 970, Bhamburda, Senapati Bapat Road, Cell: +91 98407 54521 Shivaji Nagar, Pune - 411 015. Tel: +91-44-2849 7812 / 0811 Cell: +91-98361 07331 Email: [email protected] Tel: +91-20- 4000 9000

E-mail: [email protected] COIMBATORE

Mr. V Pradeep Kumar T-3, 3rd Floor, Manchester Square CIN - L67190MH1993PLC071691 Puliakulam Road, Coimbatore - 641 037. Tel: +91-422-4332399 / 4502399 Email: [email protected]

HYDERABAD Mr. Ramesh Bob 401, Ashoka Scintilla, 3-6-502, Himayat Nagar, Hyderabad - 500 029. Cell : + 91 90520 00521 Tel: +91-40-4010 2030 E-mail: [email protected]

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