Press Release

IRB Hapur Moradabad Tollway Limited (formerly IRB Hapur Moradabad Tollway Private Limited)
March 30 2020
Ratings
Amount
Facilities Rating1 Rating Action
(Rs. crore)
Reaffirmed;
CARE A+(CE); Stable
Final Rating assigned;
Long term Bank Facilities 1541.00 (CARE A Plus [Credit
Outlook revised from
Enhancement]; Outlook: Stable)
Positive to Stable
1541.00
Total
(Rupees One Thousand Five hundred and Forty One crore only)
Details of facilities in Annexure-1
#Backed by Irrevocable and unconditional Corporate Guarantee of Sponsor, IRB Infrastructure Developers Limited (IRB) to
meet any shortfall in (a) project cost funding (b) meeting the Major Maintenance requirement of the Project (c) meeting any
shortfall in Debt Servicing and (d) one quarter DSRA during entire tenor of the loan and (e) Termination payment to meet the
entire outstanding debt obligation in case of termination of Concession due to any event during entire loan tenor (before and
after COD). HMTL has submitted relevant documents i.e. Corporate Guarantee Deed to the satisfaction of CARE. Further
relevant legal opinion is also received to the satisfaction of CARE, based on which final rating has been assigned to the bank
facilities.

Unsupported Rating 2 CARE BBB- (Triple B Minus)

Note : Unsupported Rating does not factor in the explicit credit enhancement

Detailed Rationale & Key Rating Drivers for the credit enhanced debt
The rating assigned to the bank facilities of IRB Hapur Moradabad Tollway Limited (HMTL, formerly IRB Hapur Moradabad
Tollway Private Limited) is based on the credit enhancement in the form of proposed irrevocable and unconditional corporate
guarantee provided by IRB Infrastructure Developers Ltd to meet any shortfall in (a) project cost funding (b) meeting the
Major Maintenance requirement of the Project (c) meeting any shortfall in Debt Servicing (d) to meet any shortfall in one
quarter’s Debt Service Reserve (e) Termination payment to meet the entire outstanding debt obligation in case of termination
of Concession due to any event during entire loan tenor (before and after COD). Consequent to receipt of executed transaction
documents copies to CARE, final rating has been assigned to the rated bank facilities of HMTL.
Detailed Rationale & Key Rating Drivers of the Credit Enhancement provider: IRB Infrastructure Developers Limited (IRB)
The credit perspective of IRB continues to derive strength from the experience of promoters in the Build, Operate and Transfer
(BOT) road projects, strong order book position, in-house project execution capability resulting in healthy profitability margin,
demonstrated financial flexibility and moderate liquidity profile. Further, the credit profile also gets strengthened by
deleveraging through Invit.
InviT structure allows the upstreaming of surplus cash flows to the sponsors which provides financial flexibility in making
investment decisions.
In August, 2019 IRB announced transfer of nine of its SPVs into Private InviT with IRB holding 51% and Affiliates of
Government of Singapore Investment Corporation(GIC) 49%. All the requisite approvals are in place such as SEBI registration,
approval from NHAI as well as NOC from lenders. Subsequently, all the nine SPVs are transferred to Private InviT. Additionally,
cognizance is also taken of the receipt of funds from GIC amounting to Rs. 3753 crore in February, 2020 out of which Rs. 3,000
crore is utilized towards reducing debt in five of its SPVs which will subsequently improve cash flow positions in these SPVs
going forward and the balance of Rs. 647 crore will be brought in as per the progress in the construction activity.
The rating also considers the impact of the receipt of Mumbai-Pune Expressway project which has recently been awarded to
IRB for a concession period of 10 years and 2 months and also the deferment of premium obligations for Ahmedabad-
Vadodara project by Delhi High Court until its arbitration is resolved improving cash flow positions.
The credit perspective is, however, tempered by large exposure to project SPVs leading to moderate debt protection metrics
as well as delays in the execution in five of its SPVs leading to cost overrun. Besides, rating continue to factor high capital

1
Complete definition of the ratings assigned are available at www.careratings.com and other CARE publications
2
As stipulated vide SEBI circular no SEBI/ HO/ MIRSD/ DOS3/ CIR/ P/ 2019/ 70 dated June 13, 2019. As per this circular, the
suffix ‘CE’ (Credit Enhancement) is assigned to the ratings with explicit external credit enhancement, against the earlier used
suffix ‘SO’ (Structured Obligation).
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 Press Release

intensity of in-house Engineering, Procurement and Construction (EPC) projects and subsequent refinancing risk arising out of
the long gestation period of investments and medium-term loans being used to fund/support such investments; contingent
liabilities in the form of the corporate guarantees extended towards debt raised at the project level.
The ability of the underlying operational special purpose vehicle (SPV)’s to achieve satisfactory growth in the toll revenue and
timely completion of the projects under construction within the cost envisaged constitute the key credit monitorables.
Outlook:- The revision in outlook from Positive to Stable reflects CARE’s expectation that the pace of improvement in the IRB
group’s key credit protection metrics may be delayed and also be lower than anticipated earlier, due to the continuing
subdued performance of the underlying toll SPVs requiring continued funding support alongwith large equity commitments in
near to medium term towards its under implementation SPVs.
Key Rating Drivers of IRB Hapur Moradabad Tollway Limited (HMTL)
The unsupported rating takes into account satisfactory progress of the construction work which is in line with the construction
milestones stipulated in the concession agreement. The company has already achieved Milestone-I as per the monthly
progress report for Dec, 2019 with 23% physical progress and 30% financial progress. HMTL received an appointed date in
May, 2019 post which the project received toll collection of Rs. 66 crore till Dec, 2019
The rating weaknesses include execution risk, interest rate risk as well as liability towards premium payment.
Any variation in the credit profile of the credit enhancement provider as well as Non-adherence to any covenants as per the
sanction letters or credit enhancement documents constitute the key rating sensitivities.
Rating Sensitivities
Positive Sensitivities
 Significant improvement in the operational performance of BOT projects
 Increase in the operating profit, significant reduction in borrowings thereby improving Total Debt/PBILDT below 4.5x
level
 Timely collection of receivables by Modern Road Makers Pvt Ltd (EPC and O&M contractor of IRB Group)
 Significant receipt of claim proceeds from Ahmedabad Vadodara project
Negative Sensitivities
 Significant traffic underperformance as against estimated
 Elongation of working capital cycle leading to increased reliance on working capital borrowings
 Higher than expected equity support required in ongoing and future projects as well as Mumbai-Pune project
 Sustained weakening in TOL/TNW ratio above 5.40x
 Weakened operational performance against as envisaged as well as low inflow of orders

Detailed description of the key rating drivers of IRB

Key Rating Strengths
Experienced Promoters:
The promoter and CMD of the group, Mr Virendra D. Mhaiskar has more than two decades of experience in the
infrastructure sector especially roads. Besides, he is well-supported by experienced professionals, having more than a
decade’s experience in their respective fields. As on February 2020, IRB has a portfolio of fully owned 3 BOT and 1 HAM
assets aggregating to around 1,356 lane kms; 51% holding in a Private InviT(IRB Infrastructure Trust) which has 9 BOT
projects, of which 4 projects are in the operational BOT space and 5 are under tolling and construction aggregating in total to
around 5,892 lane kms. IRB also owns holding of 16% as a sponsor in a public InviT (IRB InviT Fund) which has 7 BOT projects
in its portfolio of around 4,055 lane kms.
In February 2020, the IRB has received letter of acceptance from MSRDC for Mumbai-Pune Expressway on TOT Model with
concession period of 10 years and 2 months and the toll collections have already started from March 01, 2020.
In-house project execution capability resulting in healthy profitability margins
Engineering Procurement, Construction (EPC) and Operation & Maintenance (O&M) works for IRB’s SPVs are carried out by
Modern Road Makers Limited MRML, rated CARE A; Stable). IRB’s policy of low dependence on subcontracting for order
execution (approximately 10-15% of total order book) enabled the company to maintain healthy construction PBILDT margin
as against its peers.
Strong order book providing healthy revenue visibility
The group has a record of maintaining a strong order book of an average of 11,000 crore in last four years with a CAGR of
15% in construction revenue between FY16 to FY19. During the month of October, 2019 the NHAI terminated two of the
HAM projects costing Rs. 3,000 crore due to delay in land acquisitions. This resulted into decline in the order book to that
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extent. With the current order book position of Rs. 6801 crore as on December, 2019, the timely completion of the above
projects shall provide healthy revenue visibility for IRB over next 1 to 2 years as the construction for the projects are carried
out in-house. Subsequently, growth in the toll revenue combined with the growth in the profitable construction business
remains crucial from the credit perspective for IRB.
Financial flexibility through InviT structure
IRB launched its first InviT in May, 2017. As on December, 2019, it transferred seven assets of its operational road BOT
Projects to its InvIT and received upfront cash of ~ Rs.2200 crores and a 15% stake in the Trust. This enabled the Company to
deleverage by paying off debt of Rs. 3,000 crore.
On August, 2019 IRB announced investment from GIC of Rs. 4,400 crore in nine of its BOT projects. As on March, 2020 IRB
has already transferred these nine assets under Private InviT. As a part of the transaction GIC is 49% stakeholder in the
private InviT and IRB owns 51% stake and also have management control in the private InviT. InviT structure helps in
upstreaming of surplus cash flows to the sponsors from the beginning of operations, providing flexibility in managing
investment requirements. Further Private InviT set up with GIC has helped the company reduce its equity requirements in
the ongoing under-construction projects.
Moderate working capital management
Engineering Procurement, Construction (EPC) and Operation & Maintenance (O&M) works for IRB’s SPVs are carried out by
Modern Road Makers Limited. During FY19, the collection period for MRM has increased to 107 days and subsequently 162
days for 9MFY20. Accordingly the Gross current assets (GCA) days have also increased mainly on the back of funding cost
overrun requirements in ongoing construction projects which has impacted the group’s working capital cycle. This reflects
the working capital intensity of the overall IRB Group.
Additionally the investment advances to net worth increased to 0.62x as on December, 2019 as against 0.36x as on March,
2019. Therefore, timely collection of receivables by Modern Road Makers Pvt Ltd (EPC and O&M contractor of IRB Group)
would be the key rating monitorable.
Key Rating Weaknesses
Revenue risks associated with toll based road projects:
Historically, the linkage of toll hike to WPI partially compensated for low traffic growth to an extent. However, after 2008, the
toll rates are derived according to a formula which is 3% plus 40% of average WPI. In FY19, BOT income increased by 15% Y-
o-Y on account of pick up in the toll collection operations at Solapur-Yedashi, Kaithal-Rajasthan, Udaipur-Rajathan Border,
Gulabpura-Chittorgarh and Kishangarh-Gulabpura. Stretches such as Mumbai-Pune and Ahmedabad – Vadodara have been
the major contributors to the toll revenue. Uptick in the economic activity shall have direct bearing on the traffic growth on
key stretches in IRB’s portfolio and the same remains one of the key monitorable.
Moderate execution risk
As on December 31, 2019 IRB has six under construction projects; there exists moderate execution risk. There are delays in
the execution of construction work in five of its SPVs. There has been cost overrun in these projects which has been funded
by IRB’s internal accruals. However, considering the scale and commitment towards the above projects, the timely
achievement of COD as well as reimbursement of claims from the Authority would be the key rating monitorable.
Moderate debt protection metrics
The overall gearing level as on March 2019 was 2.68x which has increased to 2.81x as on Dec 2019. This is mainly due to
increase in the drawls for under-construction projects. Although the debt reduction to the extent GIC funds of Rs 3000 crore
has taken place in five of its SPVs, high funding requirements towards Mumbai-Pune TOT project is expected to keep the
debt levels elevated. Therefore, higher than expected equity support required in ongoing and future projects constitute key
rating monitorables.

Liquidity(IRB) : Adequate
IRB at consolidated level has cash and cash equivalent of Rs. 2,444 crore as on December, 2019. However, major cash and
bank balances is encumbered towards margin money requirement, resulting into moderate liquidity. The average unutilized
portion of fund based limit to the extent of 12% provides additional liquidity. As on March, 2019 the current portion of long
term debt stood at Rs. 874 crore was payable in FY20. However, in line with the arrangement under GIC deal, the debt to the
extent of Rs. 3,000 crore has been prepaid against the five SPVs which are part of nine SPVs transferred to Private InviT.
Analytical approach:

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Credit Enhancement Debt: IRB Consolidated

Irrevocable and unconditional Corporate Guarantee of Sponsor, IRB Infrastructure Developers Limited (IRB) to meet any
shortfall in (a) project cost funding (b) meeting the Major Maintenance requirement of the Project (c) meeting any shortfall
in Debt Servicing (d) to meet any shortfall in one quarter’s Debt Service Reserve (e) Termination payment to meet the entire
outstanding debt obligation in case of termination of Concession due to any event during entire loan tenor (before and after
COD).
Un-supported: Standalone
Applicable Criteria
Criteria on assigning ‘outlook’ and ‘credit watch’ to Credit Ratings
CARE’s Policy on Default Recognition
Rating Methodology – Toll Road Projects
Rating Methodology – Hybrid Annuity Road Projects
Rating Methodology-Construction Sector
Rating Methodology: Consolidation and Factoring Linkages in Ratings
Criteria for Rating Credit Enhanced Debt
Financial Ratios – Non-Financial Sector

About the Credit Enhancement provider - IRB Infrastructure Developers Limited -

IRB Infrastructure Developers Limited (IRB), incorporated in 1998, is an established integrated surface transportation
infrastructure company with expertise in development of BOT Toll Road Projects. The company's business segments are toll
roads, construction, airport development and real estate. As on February 2020, IRB has a portfolio of fully owned 3 BOT
(Ahmdabad-Vadodara, Thane-Ghodbunder and Pune-Nashik) and 1 HAM (Vadodara-Kim) assets aggregating to around 1,356
lane kms; 51% holding in a Private InviT which has 9 BOT projects, of which 4 projects are in the operational BOT space and 5
are under tolling and construction aggregating in total to around 5,892 lane kms. The total road length under portfolio stood
at 11,303 lane km with 2,982 lane km operational and 4,266 lane km under development. All 12 BOT projects are generating
revenues. IRB also owns holding of 16% as a sponsor in a public InviT (IRB InviT Fund) which has 7 BOT projects in its portfolio
of around 4,055 lane kms.
 In August, 2019 IRB announced transfer of nine of its SPVs into Private InviT with IRB holding 51% and Affiliates of
Government of Singapore Investment Corporation(GIC) 49%. All the requisite approvals are in place such as SEBI
registration, approval from NHAI as well as NOC from lenders. Subsequently, all the nine SPVs are transferred to Private
InviT. The EPC and O&M contracts will continue to be with IRB at the capacity as the project manager.
 Accordingly on February 25, 2020 IRB received first tranche of investment of Rs. 3,753 crore from GIC and the balance
commitment will be invested on the progress of construction of the under-construction projects. The allotment of units
to the investors completed on February 26, 2020. Subsequently on February 26 2020 and February 27 2020 IRB repaid
the debt of Rs. 3,000 crore under five of its SPV’s. Post the allotment of units, IRB holds 51% and GIC holds 49% stake in
the Private InviT.
 Additionally, the NCDs amounting to Rs. 1,400 crore issued on a private placement basis (50% subscribed by GIC, while
the balance 50% by Modern Road Makers Limited (MRML)) in December, 2019 were redeemed at par on March 03,
2020 and there are no outstanding NCDs as on date.
About IRB Hapur Moradabad Tollway Limited (HMTL)
IRB Hapur Moradabad Tollway Limited (HMTL, formerly IRB Hapur Moradabad Tollway Private Limited) is a SPV promoted by
IRB to implement the Six Laning of Hapur Bypass to Moradabad Section of NH-9 in the State of Uttar Pradesh (length 99.867
km) under NHDP Phase-V of National Highway Authority of India (NHAI, rated CARE AAA; Stable) through PPP on Design,
Build, Operate Transfer (DBFOT) basis. HMTL has signed the Concession Agreement (CA) with NHAI on May 29, 2018 for a
period of 22 years ending in Nov, 2043. The project has been bid by IRB with a premium of Rs.31.50 crores. IRB will pay to the
authority immediately after the 3rd anniversary of COD a premium of Rs.31.50 crores and for each subsequent year till the 9th
anniversary of COD the premium shall increase by an additional 3% and from each subsequent year from the 9th anniversary
of COD until the end of the concession period the premium shall increase by an additional 8% each year till the end of
concession period. As the project involves widening of existing 4 lane highway into a 6 lane facility, tolling has already
commenced from the Appointed Date (i.e. May 28, 2019).
HMTL is a part of the nine assets being transferred to a private InviT to be held by IRB and GIC in the ratio of 51:49.

Covenants of rated facility: Detailed explanation of covenants of the rated facilities is given in Annexure-3

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Brief Financials of IRB (Consolidated) (Rs. crore) FY18 (A) FY19 (A)
Total operating income 5836.07 6880.54
PBILDT 2834.79 3117.06
PAT 919.66 849.97
Overall gearing (times) 2.44x 2.68x
Interest coverage (times) 2.90x 2.77x
A: Audited; Note: Financials are classified as per CARE’s internal standards

Status of non-cooperation with previous CRA: Not Applicable

Any other information: Not Applicable

Rating History for last three years: Please refer Annexure-2

Annexure-1: Details of Facilities

Name of the Date of Coupon Maturity Size of the Issue Rating assigned
Instrument Issuance Rate Date (Rs. crore) along with Rating
Outlook
Fund-based - LT-Term Loan - - March, 2036 1541.00 CARE A+ (CE);
Stable

Un Supported Rating-Un - - - 0.00 CARE BBB-

Supported Rating (Long Term)

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) assigned Rating(s) Rating(s)
(Rs. crore) assigned in in 2018-2019 assigned in assigned in
2019-2020 2017-2018 2016-2017
1. Fund-based - LT-Term LT 1541.00 CARE A+ - 1)Provisional CARE - -
Loan (CE); A+ (SO); Positive
Stable (04-Jan-19)

2. Un Supported Rating-Un LT 0.00 CARE - - - -

Supported Rating (Long BBB-
Term)

Annexure-3: Detailed explanation of covenants of the rated facilities

Name of the Instrument Detailed explanation

A. Financial covenants
I. Cash Sweep In case DSCR in any year exceeds 1.30x, 30% of surplus cash flow above 1.30x DSCR
generated in the year under consideration will be utilized for prepayment of term debt, in
inverse order of maturity, without payment of prepayment penalty to that extent.
II. DSRA Reserve The company shall always maintain DSRA equivalent to the amount of ensuing 1 quarters
debt servicing requirement and any incremental DSR requirement above the initial DSR
(i.e. funded as part of project cost) shall be earmarked from the cash flows of the
company.
III. Key Parameters for DSCR, Interest Coverage Ratio, TOL/Adjusted TNW and Debt/PBILDT (as per base plan)
Testing Financial
covenants

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Annexure-4: List of entities consolidated

Proportion of ownership interest

Principal nature
S.No. Name Of Entitty either directly or indirectly
of activity
As on 31.03.19 As on 31.03.18
Subsidiaries (Direct and indirect)
1 Ideal Road Builders Private Limited (IRBPL) Road Infrastructure 100% 100%
2 Mhaiskar Infrastructure Private Limited (MIPL) Road Infrastructure 100% 100%
3 Modern Road Makers Private Limited (MRMPL) Road Infrastructure 100% 100%
4 Aryan Toll Road Private Limited (ATRPL) Road Infrastructure 100% 100%
5 ATR Infrastructure Private Limited (ATRFL) Road Infrastructure 100% 100%
6 IRB Infrastructure Private Limited (IRBFL) Road Infrastructure 100% 100%
7 Thane Ghodbunder Toll Road Private Limited (TGTRPL) Road Infrastructure 100% 100%
8 IDAA Infrastructure Limited (IDAA) (upto May 8, 2017) Road Infrastructure - -
9 Aryan Infrastructure Investments Private Limited (AIIPL) Real Estate 100% 100%
10 NKT Road and Toll Private Limited (NKT) Road Infrastructure 100% 100%
11 MMK Toll Road Private Limited (MMK) (Subsidiary of Road Infrastructure 100% 100%
IRBPL)
12 IRB Surat Dahisar Tollway Limited (IRBSD) (upto May 8, Road Infrastructure - -
2017)
13 IRB Kolhapur Integrated Road Development Company Road Infrastructure 100% 100%
Private Limited (IRBK)
14 Aryan Hospitality Private Limited (AHPL) Hospitality 100% 100%
15 IRB Sindhudurg Airport Private Limited (IRBSA) Airport development 100% 100%
16 IRB Pathankot Amritsar Toll Road Limited (IRBPA) (upto Road Infrastructure - -
September 28, 2017)
17 IRB Talegaon Amravati Tollway Limited (IRBTA) (upto Road Infrastructure - -
May 8, 2017)
18 IRB Jaipur Deoli Tollway Limited (IRBJD) (upto May 8, Road Infrastructure - -
2017)
19 IRB Goa Tollway Private Limited (IRB Goa) Road Infrastructure 100% 100%
20 IRB Tumkur Chitradurga Tollway Limited (IRBTC) (upto Road Infrastructure - -
May 8, 2017)
21 IRB PS Highway Private Limited (formerly known as Road Infrastructure 100% 100%
MRM Highways Private Limited) (IRBPS)
22 IRB Ahmedabad Vadodara Super Express Tollway Private Road Infrastructure 100% 100%
Limited (IRBAV)
23 MRM Mining Private Limited (Formerly "J J Patel Road Infrastructure 100% 100%
Infrastructural and Engineering Private Limited")
(Subsidiary of MRMPL)
24 IRB Westcoast Tollway Private Limited (IRB Westcoast) Road Infrastructure 100% 100%
25 MVR Infrastructure and Tollways Limited (MVR) (upto Road Infrastructure - -
May 8, 2017)
26 Solapur Yedeshi Tollway Private Limited (SYTPL) Road Infrastructure 100% 100%
27 Yedeshi Aurangabad Tollway Private Limited (YATPL) Road Infrastructure 100% 100%
28 Kaithal Tollway Private Limited (KTPL) Road Infrastructure 100% 100%
29 AE Tollway Private Limited (AETPL) Road Infrastructure 100% 100%
30 IRB PP Project Private Limited (formerly known as Zozila Road Infrastructure 100% 100%
Tunnel Project Private Limited) (IRBPP)
31 Udaipur Tollway Private Limited (UTPL) w.e.f October 6, Road Infrastructure 100% 100%
2016
32 CG Tollway Private Limited (CGTPL) w.e.f October 18, Road Infrastructure 100% 100%
2016
33 Kishangarh Gulabpura Tollway Private Limited (KGTPL) Road Infrastructure 100% 100%
w.e.f January 12, 2017
34 Modern Estate - Partnership Firm Real Estate 100% 100%
35 VK1 Expressway Private Limited (VK1) w.e.f April 17, Road Infrastructure 100% 100%
2018
36 IRB Hapur Moradabad Tollway Private Limited (IRBH) Road Infrastructure 100% 100%
w.e.f April 18, 2018

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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 care@careratings.com
for any clarifications.

Contact us
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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.

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