Press Release Hotel Parmeshwari
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Press Release Hotel Parmeshwari March 02 2020 Rating Facility/Instrument Amount (Rs. crore) Rating1 Rating Action Issuer not cooperating; CARE B; Stable; ISSUER NOT Revised from CARE B+; Stable COOPERATING* Long Term Bank Facilities 6.00 (Single B Plus; Outlook: [Single B; Outlook: Stable; Stable) on the basis of best Issuer not cooperating] available information Total 6.00 (Rs. Six crore only) Details of instruments/facilities in Annexure-1 Detailed Rationale & Key Rating Drivers CARE has been seeking information from Hotel Parmeshwari (HPR) to monitor the ratings vide e-mail communications/letters dated January 08, 2020, January 22, 2020 and January 29, 2020 February 20, 2020 and numerous phone calls. However, despite our repeated requests, HPR has not provided the requisite information for monitoring the ratings. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE’s opinion is not sufficient to arrive at a fair rating. Further, HPR has not paid the surveillance fees for the rating exercise as agreed to in its Rating Agreement. The rating on HPR’s bank facilities will now be denoted as CARE B; Stable; ISSUER NOT COOPERATING*. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating(s). The rating of HPR have been revised on account of project implementation risk with its greenfield project, its presence in the cyclical and competitive nature of the industry and constitution as a partnership concern. The rating, however, derives strength from experienced and resourceful partner and location advantage of the hotel. Detailed description of the key rating drivers At the time of last rating on March 04, 2019 the following were the rating strengths and weaknesses Key Rating Weakness Project implementation risk associated with the hotel The firm envisaged total cost of the project of Rs.11.68 crore. HPR has started construction work on the hotel in August 2017 and envisaged to be completed till March 2019. The firm has incurred total cost of Rs.7.02 crore towards the project where 100% civil work and 75% finishing work has been done which is within envisaged time and cost. Hence, project implementation risks is also associated with the project for remaining part of the hotel. Cyclical and Competitive nature of the industry with dependence on tourist’ arrivals and constitution as a partnership firm The hospitality industry is highly sensitive to the untoward events such as slowdown in the economy. Rajasthan hotel industry is primarily dependent on tourist arrivals which in turn are dependent on the global economy. Further, Hotel Parmeshwari is located at Salasar Dham which is famous religious place of Rajasthan. Hence the occupancy of the hotel is mainly dependent on the pilgrims. Furthermore, there is an inherent risk of possibility of withdrawal of capital and dissolution of the concern in case of death/insolvency of partner. Key Rating Strengths Experienced and resourceful partners Mr. Laxmi Narayan Pujari, Partner, priest of the Salasar Dham Temple, has experience of more than two decade in the hotel industry. Further, Mr. Ram Bihari Pujari and Mr. Vishnu Dutt Pujari, Partner, sons of Mr. Laxmi Narayan Pujari also have experience of 8-10 years in the hotel industry. Further, the partners of the firm are resourceful reflected by their net worth. Location advantage The hotel of Hotel Parmeshwari will be located near main bus stand of Salasar Dham. Salasar Dham in India is a place of religious importance for the devotees of Hanuman. The temple of Balaji, is situated in the middle of Salasar and attracts 1Complete definitions of the ratings assigned are available at www.careratings.com and in other CARE publications. 1 CARE Ratings Limited Press Release innumerable worshippers throughout the year. Salasar Balaji is in the religious circuit that includes the pilgrim centres of Rani Sati Temple, Jeen Mata and Khatushyamji, which are located close to it. Analytical approach: Standalone Applicable Criteria Policy in respect of Non-cooperation by issuer Criteria on assigning Outlook and Credit watch to Credit Ratings CARE’s Policy on Default Recognition Rating Methodology – Hotel Industry Rating Methodology – Project Stage Companies Financial ratios – Non-Financial Sector About the Firm Hotel Parmeshwari (HPR) was incorporated in August, 2016 as a partnership firm by Mr. Laxmi Narayn Pujari, Mr Bihari Pujari and Mr. Vishnu Dutt Pujari with an objective to establish a hotel at Salasar (Rajasthan) and agrees to share profit and loss in the ratio of 40:30:30. HPR has started construction of the hotel from the month of August 2017 which envisaged to be completed by March 2019. The project consist total 52 rooms and other amenities like restaurant, banquet hall, swimming pool, gym, spa etc. Status of non-cooperation with previous CRA: None Any other information: None Rating History for last three years: Please refer Annexure-2 Annexure-1: Details of Instruments/Facilities Name of the Date of Coupon Maturity Size of the Rating assigned along with Instrument Issuance Rate Date Issue Rating Outlook (Rs. crore) Fund-based - LT-Term - - March -2030 6.00 CARE B; Stable; ISSUER NOT Loan COOPERATING* Issuer not cooperating; Revised from CARE B+; Stable on the basis of best available information 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 2019-2020 2018-2019 2017-2018 2016-2017 1. Fund-based - LT-Term LT 6.00 CARE B; Stable; - 1)CARE B+; 1)CARE B+; - Loan ISSUER NOT Stable Stable COOPERATING* (04-Mar-19) (16-Mar-18) Issuer not cooperating; Revised from CARE B+; Stable on the basis of best available information 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. 2 CARE Ratings Limited Press Release Contact us Media Contact Mradul Mishra Contact no. – +91-22-6837 4424 Email ID – [email protected] Analyst Contact Group Head Name – Mr Abhishek Jain Group Head Contact no.- 0141-4020213/14 Group Head Email ID- [email protected] Business Development Contact Name: Mr Nikhil Soni Contact no. : 0141-4020213/14 Email ID : [email protected] About CARE Ratings: CARE Ratings commenced operations in April 1993 and over 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. Disclaimer CARE’s ratings are opinions on the likelihood of timely payment of the obligations under the rated instrument and are not recommendations to sanction, renew, disburse or recall the concerned bank facilities or to buy, sell or hold any security. CARE’s ratings do not convey suitability or price for the investor. CARE’s ratings do not constitute an audit on the rated entity. 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. CARE or its subsidiaries/associates may also have other commercial transactions with the entity. In case of partnership/proprietary concerns, the rating /outlook assigned by CARE is, inter-alia, 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. CARE is not responsible for any errors and states that it has no financial liability whatsoever to the users of CARE’s rating. Our ratings do not factor in any rating related trigger clauses as per the terms of the facility/instrument, which may involve acceleration of payments in case of rating downgrades. However, if any such clauses are introduced and if triggered, the ratings may see volatility and sharp downgrades. 3 CARE Ratings Limited .