Rating Rationale Reliance Big Private Limited nd 2 ​ May 2019 ​

Brickwork Ratings downgrades the rating for the Bank Loan Facilities of Rs. 100.00 Cr of Reliance Big Entertainment Private Limited (RBEPL)

Particulars Amount Facility Rating* (Rs. Crs) Rated Previous Present Previous Present BWR BB+(SO) BWR BBB+(SO) (Pronounced as BWR (Pronounced BWR Triple B Double B Plus) Plus) Term Loan 100.00 100.00 (Structured Obligation) (Structured Obligation) Downgrade Credit Watch With Credit watch with negative negative implications implications Total 100.00 100.00 (INR One Hundred Crores Only)

* Please refer to BWR website www.brickworkratings.com/ for definition of the ratings ​ ​ ​

Rationale/Description of Key Rating Drivers/Rating sensitivities: BWR principally relied upon the audited financial results up to FY18, publicly available information and information / clarification provided by the company and recent developments.

The rating has been downgraded from BWR BBB+ (SO)/credit watch with negative implications to BWR BB+(SO)/credit watch with negative implications on account of the continuing deterioration in the financial risk profile and revision in the rating of the underlying companies whose shares have been pledged viz; Limited from BWR AA (credit watch with developing implications) to BWR A+ (Credit watch with negative implications) and Reliance Home Finance Limited from BWR A+ (Credit watch with negative implications) to BWR C (Credit watch with negative implications) and continued non maintenance of the required security cover and the same has substantially diminished. The rating is also constrained by the impaired financial flexibility of the underlying companies and Reliance ADA group.

The rating continues to take into consideration the combined security for the bank loan facilities of Reliance Big Entertainment Private Limited and Digital Entertainment Limited (Rating withdrawn by BWR as the loan has been fully repaid), thereby providing security cover by way of pledge of shares of Reliance Capital Limited and Reliance Home Finance Limited (RHFL) and Limited (RIL) which are listed. The rating of RBEPL is constrained by unavailability of assured cash flows of the issuer at redemption and dependency on the group support, refinance or alternatively liquidation of the securities to repay the term loan. The credit enhancement of the rating on account of

nd 1 2 ​ May 2019 ​ pledge of shares from Reliance Infrastructure Limited (RIL) and Reliance Home Finance Limited (RHFL) is not considered by BWR as the companies being rated as RIL at BWR C (Issuer Not cooperating) and RHFL at BWR C (Credit watch with negative implications).

The ratings continues to be on rating watch with negative implications on account of constrained financial flexibility of the company, sharp fall in the share prices of the underlying security over past one year, limited ability and impaired financial flexibility of the group. Performance of the pledged stock, the share coverage ratios and continued support from promoters and the ability to refinance the debt which is due in the near term will be the key rating sensitivities and BWR would continue to monitor further developments.

About the company Reliance Big Entertainment Pvt Ltd (RBEPL), incorporated in year 2006, is part of Reliance ADAG Group. The company primarily operates in four segments viz. Internet & New Media, & Television Entertainment, Games and Broadcasting. The company produces, acquires and distributes . Reliance Entertainment is involved in film production in Hindi and several other Indian languages and distributing them worldwide. The board of RBEPL consists of Mr. Ambar Basu, Mrs. Sweta Agnihotri and Mr. Sanjay Dubey.

Key Terms of Sanction IndusInd Bank has revised the terms of sanction of the Bank Loan facilities, whereby the collateral security in the form of pledge of shares of Reliance Infrastructure Limited, Reliance Capital Limited and Reliance Home Finance Limited are combined for the bank facilities availed by Reliance Big Entertainment Private Limited and Zapak Digital Entertainment Limited. The combined security cover taking into consideration Reliance Infrastructure Limited and Reliance Capital Limited shares comes to 1.35 times. The company has also provided security of Limited shares resulting into a total security cover at 2.18 times. However for the purpose of ratings, BWR has not considered share pledge of Reliance Communications Limited and the security in the form of land. The security cover shall be calculated on the total amount outstanding on the Facility including Principal, Interest due and penal charges if any. The facility will require a top – up only in the form of Reliance Capital Limited and / or Reliance Infrastructure Limited shares.

Company Financial Performance The Company's Total Operating Income stands at Rs. 235.28 Crs in FY18 against Rs. 73.92 Crs in FY17. The company posted loss of Rs. 865.34 Crs in FY18 against loss of Rs. 548.02 Crs in FY17.

Liquidity: The company had cash & cash equivalent of Rs. 71.79 Crs as of 31-3-2018.

nd 2 2 ​ May 2019 ​

Key Financial Indicators

Particulars (Amt in Rs. Crs) FY17 (Audited) FY18 (Audited) Total Operating Income 73.92 235.28 EBITDA -24.21 -260.85 PAT -548.02 -865.34 Tangible Networth -2162.86 -3028.62

Rating History for the last three years: (including withdrawn/suspended ratings)

Instrum Sl. No. ent/Facil Current Rating (Year 2019) Rating History ity Amount (Rs in Rating Type Feb 2019 Aug 2018 July 2017 Cr)

BWR BWR BB+(SO) BWR A+(SO) BWR (Pronounced as BBB+(SO) (Pronounce A+(SO) BWR Double B (Pronounced d as BWR (Pronounce Plus) BWR Triple A Plus) Term Long d as BWR 1 100.00 (Structured B Plus) (Structured Loan Term A Plus) Obligation) (Structured Obligation) (Structured Downgrade Obligation) Credit Obligation) Credit watch Credit Watch watch with Outlook:St with negative With negative developing able implications implications implication s Total 100.00 (INR One Hundred Crores Only)

nd 3 2 ​ May 2019 ​

Reference to Applicable Criteria

● General Criteria ● Approach to Financial Ratios ● Structured Obligation Instruments

Analytical Contacts Media Mr. B K Piparaiya [email protected] Senior Director- Ratings Relationship Contact [email protected] [email protected] Phone: 1-860-425-2742

For print and digital media The Rating Rationale is sent to you for the sole purpose of dissemination through your print, digital or electronic media. While it may be used by you acknowledging credit to BWR, please do not change the wordings in the rationale to avoid conveying a meaning different from what was intended by BWR. BWR alone has the sole right of sharing (both direct and indirect) its rationales for consideration or otherwise through any print or electronic or digital media.

Note on complexity levels of the rated instrument: 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 ​ ​ ​ ​ [email protected]. ​

About Brickwork Ratings Brickwork Ratings (BWR), a SEBI registered Credit Rating Agency, has also been 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 Nationalized Bank, as its promoter and strategic partner. BWR has its corporate office in Bengaluru and a country-wide presence with its offices in Ahmedabad, Chandigarh, Chennai, Guwahati, Hyderabad, Kolkata, Mumbai and New Delhi along with representatives in 150+ locations. BWR has rated debt instruments/bonds/bank loans, securitized paper of over ₹ 9,30,000 Cr. In addition, BWR has rated about 5000 MSMEs. Also, Fixed Deposits and Commercial Papers etc. worth over ₹19,700 Cr have been rated. Brickwork has a major presence in rating of nearly 100 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.

nd 4 2 ​ May 2019 ​