Rating Rationale Brickwork Ratings assigns ‘BWR BBB-’ & ‘BWR A3’ for D P Jain (Nagda - Gogapur) BOT Annuity Project Pvt Ltd.’s (DPJNG or the ‘Company’) Bank Credit Facilities of ₹ 25.94 Cr from Corporation Bank. *Facility Fund Based Term Loan Non Fund Based BG Total Limits (₹ Cr) Tenure 24.00 Long Term 1.94 Short Term 25.94 Rating BWR BBB(Pronounced BWR Triple B Minus) BWR A3 (Pronounced BWR A Three) INR Twenty Five Crores and Ninety Four Lakhs only The Rating1 ‘BWR BBB-’ stands for an instrument that is considered to have moderate degree of safety regarding timely servicing of financial obligations. Such instruments carry moderate credit risk. The rating has, inter alia, factored established track record of the sponsors in infrastructure road projects, fixed stream of revenue in the form of annuities from MRDPC (Madhya Pradesh Road development Corporation Ltd) for the concession period of 15 years, 100% ROW (right of way) being received by them from and comfortable Debt Service Coverage Ratio for the project period. The rating is however constrained by inherent risks associated with the BOT projects, timely receipt of annuity from MRDPC, and project completion risks. Background: D P Jain Nagda Gogapur BOT Annuity Road Project Pvt Ltd is a Special Purpose Vehicle (SPV) Company incorporated by D P Jain & Co Infrastructure Pvt Ltd (DPJ) on 10th October 2013 to undertake the Development of Nagda – Gogapur Major District Road on BOT (Annuity) basis. The Project Highway is located in the state of Madhya Pradesh and has a total length of 14.980 km. The Project Highway starts at Km 0.000 from the end of CC road of Nagda village and end at Km 14.980 at Gogapur village connecting to Mahidpur‐Tal MDR in Ujjain District. The SPV has to Finance and construct the Project Highway i.e., two-laning the highway, and thereafter Manage, Operate and Maintain the same for the Concession Period of fifteen years (15 years). This is a free-use road, and the company gets revenues by way of Annuity, which is the source of funds for meeting the debt servicing obligations. Concession Details: • Concession Period of 15 years from Appointed Date. • Semi ‐ annual Annuity of Rs. 2.995 crores. • At least 80% of the Right of Way (ROW) shall be made available by MPRDC free from all encumbrances on or before the Appointed Date. 1 Please refer to www.brickworkratings.com for definition of the Ratings www.brickworkratings.com 1 27 Oct 2014 • • • Provision for Substitution Agreement, Escrow Agreement and State Support Agreement. Termination payments under an Event of Default and Force Majeure events. Bonus equivalent to Rs. 0.02 crores per day multiplied with no. of days COD achieved prior to SCOD. Rating Outlook: The outlook is stable. The company’s ability to complete the project constructions without any time/cost overrun and carry-on the routine maintenance as well as major maintenace as per the scheduled timelines mentioned in the concession agreement and timely receipt of annuity from MRDPC will be the key sensitivites. Receipt of bonus payment from MRDPC on the basis of an early completion of the project also needs to be watched. Analyst Contact Relationship Contact [email protected] [email protected] Phone Media Contact 1-860-425-2742 [email protected] 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. www.brickworkratings.com 2 27 Oct 2014
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