Brief Rationale DECEMBER 29, 2014 CARE REAFFIRMS the RATING ASSIGNED to BANK FACILITIES of UNIQUEST INFRA VENTURES PVT
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Brief Rationale DECEMBER 29, 2014 CARE REAFFIRMS THE RATING ASSIGNED TO BANK FACILITIES OF UNIQUEST INFRA VENTURES PVT LTD Ratings Amount Facilities Ratings1 Remarks (Rs. crore) Long/Short-term Bank Facilities 75 CARE AA-/CARE A1+ Reaffirmed [Double A Minus/A One Plus] Total Facilities 75 Rating Rationale The ratings continue to derive strength from the highly resourceful and experienced promoter of UIPL and their committed investment towards funding of existing & new projects and for meeting working capital gap. Being a debt free company with 100% equity-funded growth plan in the medium term also lends comfort to the rating. The rating strengths are partially offset by the initial stage of operations, limited sources of revenue (project development fees) and cash deficit in the initial years at a consolidated level. Going forward, the ability of the management to explore suitable investment opportunities amidst the sluggish economic growth, successful completion of the under-implementation project under UIPL’s joint venture would be the key rating sensitivities. Background Uniquest Infra Ventures Pvt Ltd (UIPL) is a joint venture (JV) entered into by UEM Group Berhad (UEM) and IDFC Ltd (IDFC) to develop road projects in India. UEM is a 100% subsiidary of Khazanah Nasional Berhad (Khazanah), the ultimate holding company. Khazanah, incorporated in 1993 as a public limited company, is the investment holding arm of the Government of Malaysia entrusted to hold and manage the commercial assets of the government and to undertake strategic investments. UEM, through its 100% step down subsidiary - Ghir Investment (Mauritius) Ltd (Ghir) holds 80.10% and IDFC holds the balance 19.90% equity stake in UIPL. The board of Khazanah has approved an initial equity commitment of Rs.530 crore, while the board of IDFC has approved a sum of Rs.300 crore (including investment commitment of Rs.80 crore from IDFC Projects Ltd) for investments in the road projects in India through UIPL. Jetpur Somnath Tollways Pvt Ltd (JSTPL rated CARE BBB), a toll-based road project based in Gujarat is the first such investment for Uniquest. During FY14, UIPL has also acquired 67% stake in Khalghat Sendhwa Tollways Pvt Ltd (KSTL, rated CARE BBB). Subsequently the stake was increased to 74% in July 2014. KSTL is operating a 83 km, four lane toll project (Khalghat to Madhya Pradesh/Maharashtra border section of NH-3 from Km. 84.70 to Km. 167.50) since April 2011. UIPL has been ranked second in the list of prequalified bidders for 2014 by NHAI and can bid for projects, where the value of each project should not exceed Rs.11,371 crore. During FY14, UIPL recorded a net loss of Rs. 1.44 crore (as against net loss of Rs.0.96 crore in FY13) on a total income of Rs. 7.11 crore (as against operating income of Rs.9.23 crore in FY13). Analyst Contact Name: Sudhir Kumar Tel: 011-45333232 Email: [email protected] 1Complete definition of the ratings assigned are available at www.careratings.com and other CARE publications 1 Credit Analysis &Research Limited Brief Rationale **For detailedRationale Report and subscription information, please contact us at www.careratings.com 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. 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. 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