IndusInd Bank Ltd

Date: June 26, 2023 Date of meeting: Agenda No:  

MEMORANDUM for APPROVAL BY Admin Forum II
Location Hyderabad
Segment CCBG Large Corporates
Relationship Manager/Zonal Head Narsimha Rao/ SJN Gupta Vutukuri
Credit Analyst Shashank Rao

I. Borrower Profile:
Name: KNR Constructions Limited (KNR) Constitution: Public Limited Company (Listed)
Industry: Construction EPC Banking with us since: Jan 2021
IRAC Status: Standard Banking Arrangement: Consortium
Group, if any /Promoter: KNR Group Key People: Mr K Narasimha Reddy
Due date of next review: June 12th 2022
Date of last renewal: June 13th 2022 Proposed limit continuation up to: Aug 12,
2023
LEI No.: 3358004O6OFQEVQY3542
CME /Real Estate /Priority Sector/ Project Finance: NA
(valid up to Mar 05, 2024)

II. Brief on the borrower and background of the transaction:

KNR Constructions Ltd (KNRCL), listed on the BSE & NSE, was incorporated in 1995 and provides EPC services,
primarily for the roads and highways segment. Majority of clients for KNRCL are government agencies, including the
central government, NHAI, and the public works departments of state governments. KNRCL has a pan India presence
with state/NHAI projects across 11 states in India.

IndusInd Bank had enhanced working capital facilities to Rs 240 Cr vide ECC meeting dated Jun 12, 2022 and
subsequently in Sep 2022, Rs.20 Crs was sanctioned towards Assignment of Receivable limit under JSW Steel Ltd
program, which was enhanced to Rs 35 Crs in March 2023.
 

III. Facility Details are as below

O/s as on June
Facility Details - (Rs in crores) Existing Limit Irregularity
2023
Cash Credit 5.00 -
WCDL (Sub-limit of CC) (5.00) -
Assignment of Receivables (AoR) 35.00 -
Total Fund Based Exposure 40.00 - NIL
Bank Guarantee 235.00 29.00
Total Non-Fund Based Exposure 235.00 29.00
Total Exposure 275.00 29.00

IV. Credit Rating: 

Internal Credit
IB3+ on ABS 22
Rating (ICR) 
Particulars Latest
Agency India Ratings CRISIL
Customer External
Rating AA/A1+ AA-/A1+
rating, if any 
Month Jan 2023 Sep 2022
Rated amount Rs. 2400 crore Rs. 2350 crore

V. Compliance
Compliance with all sanction covenants : Complied, with no deferrals overdue

Completion of documentation :
formalities
Any pending issues :
VI. Conduct of account :
No current default As on: Jun 26, 2023
CRILC Status 
Reason for SMA, if any: Nil
Moved In and Out
Nil instances during the past 12 months
of Default 

VII. Security

:
Facility Security Status
 First pari passu charge on entire current assets present and
future along with the other working capital lenders of the
Consortium (Total value Rs 1468 Crs as on March 31, 2021,
as per BS)
 First pari passu charge on equitable mortgage of land &
buildings (Total value Rs 76.67 Crs as per valuation dated Created and
CC/WCDL/BG
Nov 2020) perfected
 Hypothecation of certain equipment’s of written down value
as on March 31, 2021 is Rs. 110.03 crs

 Personal guarantee of Director (Mr. K Narasimha Reddy)

Assignment of
Created and
Receivables under JSW Unsecured and backed by Indemnity from JSW Steel
perfected
Steel Ltd program

VIII. Performance & Financial Indicators:

Parameters FY20 FY21 FY 22 FY23
(Rs in crores) Aud. Aud. Aud. Proj Aud/Abridged
Net Sales 2244 2703 3273 3,500 3,744
EBIDTA 487 536 678 653 722
PAT 225 244 382 392 499
Net cash flows 399 388 509 512 517
TNW 1463 1719 2124 2,437 2611
Total Debt (1+2+3) 50 1 0 178 6
1. LTD 1 0 0 17 6
2. CPLTD 16 0 0 17 -
3. Bank Borrowings 34 1 0 145 -
Loans from promoters 179 0 0  
Mobilization Advance 117 149 145 143 N.A
Adjusted Debt^ 346 150 145 321
Total assets 2718 2921 3329 3,807 3700
Contingent Liability 138 98 177 98 NA
Ratios  
EBIDTA Margin (%) 21.70 19.83 20.71 18.67% 19.28%
Net Margin (%) 10.04 9.03 11.67 11.19% 13.33%
Debt/TNW 0.03 0.00 0.00 0.07 0
Adj. Debt/TNW 0.24 0.09 0.07 0.13 0
Debt/EBIDTA 0.10 0.00 0.00 0.27 0
Adj. Debt/EBITDA 0.71 0.28 0.21 0.49 0
TOL / TNW 0.75 0.61 0.51 0.50 0.36
Current Ratio 1.48 1.80 2.12 1.68 2.57
Interest Cover 10.27 11.00 24.70 17.06 26.74
DSCR 6.33 6.80 19.82 10.14 12
  Slight reductin in EBITDA% due to elevated Input prices of cement, steel
 As of March 31, 2023, the company has an outstanding orderbook position of INR 7,092 crores
 FY '23 standalone as well as the consolidated numbers include a profit on account of sale of balance 51% of
the KNR Tirumala and KNR Shankarampet Project Limited and 100% stake of KNR Srirangam Infra Project to
Cube Highway Infrastructure III Pte. Limited.

IX. Business Request: Annual renewal/ review of facilities due since June 12, 2023. BU is awaiting
certain clarifications from the Borrower and the renewal proposal shall be submitted shortly.
Meanwhile, borrower has requested for certain transactions to be processed. Accordingly, request
for continuation of limits for a period of further 3 months from the limit expiry i.e., till Aug 12, 2023
to permit the operations in the account. 

Due date of renewal    :  June 12, 2023

Is this the first request for Yes
: 
continuation / extension of limits  Limits proposed for continuation up to: Aug 12, 2023 
Conduct of Account    :  Satisfactory   
Security creation/perfection status    :  Created and perfected
Pending deferral    :  Nil 
Current request to allow operations
:  Aug 12, 2023 
till   
Reasons for delay in submitting the BU is awaiting certain clarifications from the Borrower and proposal
: 
renewal note    shall be submitted shortly.
 
The limits expired on June 12, 2023. We recommend for continuation of limits till Sep 12, 2023 to permit operations in
the account. The existing terms and conditions remain unchanged. 

Delegation of Power: Basis the Latest DOP, request can be classified under Administrative matters “Continuation of
existing limits for maximum upto 6 months from expiry of original sanction”. Basis exposure and internal rating, the
sanctioning authority would be ECC, hence the request is submitted to Admin Forum- 2

Submitted for approval

Shashank Rao Abhishek Shetty Arpit Srivastava

Credit Analyst Zonal Head-Credit Segment Head-credit

Resolution:
The Admin Forum 2 may consider and, if deemed fit, pass the following resolution:

“The Admin Forum 2 considered and after discussions approved:

 Continuation of existing working capital limit till Sep 12, 2023
to KNR Constructions Limited as detailed in the memorandum dated June 26, 2023”