Press Release

Tirupati Build-Con Private Limited

Ratings
Facilities/Instruments
Long Term / Short Term Bank
Facilities
Long Term Bank Facilities
Total Bank Facilities
1
Details of instruments/facilities in Annexure-1
May 31, 2022
Amount
Rating1 Rating Action
(Rs. crore)
Rating continues to remain under ISSUER NOT
COOPERATING category; Reaffirmed at CARE BB;
- - Stable / CARE A4; ISSUER NOT COOPERATING*
(Double B; Outlook: Stable / A Four ISSUER NOT
COOPERATING*) and Withdrawn
Rating continues to remain under ISSUER NOT
COOPERATING category; Reaffirmed at CARE BB;
- - Stable; ISSUER NOT COOPERATING*
(Double B; Outlook: Stable ISSUER NOT
COOPERATING*) and Withdrawn
0.00
(Rs. Only)

Detailed Rationale & Key Rating Drivers

CARE has reaffirmed and withdrawn the outstanding rating of 'CARE BB; Stable; Issuer Not Cooperating/CARE A4; Issuer Not
Cooperating’ [Double B; Outlook: Stable; ISSUER NOT COOPERATING/A Four; ISSUER NOT COOPERATING] assigned to the
bank facilities of Tirupati Build-Con Private Limited (TBPL) with immediate effect. The above action has been taken at the
request of TBPL and ‘No Objection Certificate’ received from the bank that has extended the facilities rated by CARE.

Detailed description of the key rating drivers

Key Rating Weaknesses
Limited experience in execution of large sized orders:
During FY19, TBPL have received two large orders amounting to Rs.424 crore and Rs.333 crore. TBPL have track record of
executing single order comprising of less than Rs.125 crore. Ability to execute such large sized orders remains key rating
sensitivity.

Working capital intensive nature of business:

The operations of company are working capital intensive due to tender based and long-term nature of contracts. TBPL needs to
furnish earnest money deposits (EMD) during the bidding process which leads to funds getting blocked even before the project
is awarded. A part of the sales proceeds are also withheld in the form of retention money. However, EMD is refunded as and
when company submits Bank Guarantee to that extent. Although the collection period appears high, the same has improved to
78 days in FY21 as against 86 days in FY20 on account of improved collection from projects under execution. Apart from the
above, inventory period remained high at 94 days in FY21 as against inventory of 82 days in FY20. This is mainly due to billing
being done based on achievement of milestone. The high working capital requirement is partly funded through high average
creditor period of 69 days in FY21, mainly subcontractors. Further, the clientele comprises reputed entities and as such
company does not have significant default risk attached with receipt of dues from customers.

Tender-based nature of operations in intensely competitive civil construction industry:

TBPL receives most of its work orders from government departments. All these are tender-based and the revenues are
dependent on the TBPL’s ability to bid successfully for these tenders. However, profitability margins of company are positively
moving but may come under pressure because of the competitive nature of the industry. There are numerous unorganized
players operating in the segment due to which there is intense competition. However, the promoters’ long industry experience
in Madhya Pradesh and Chhattisgarh mitigates this risk to some extent.

Geographical concentration in revenue:

The operation of TBPL is majorly restricted to Madhya Pradesh and Chhattisgarh. Out of the current outstanding order book,
around 63% orders are from Madhya Pradesh and the rest are from Chhattisgarh.

Key Rating Strengths

Experienced promoters with long track record:
The promoter of TBPL, Mr. Padam Singhania, has more than three decades of experience in the field of construction. He is
assisted by director Mr. Harshvardhan Singhania & other family member namely Mr. Aakashdeep Singhania and Mr.
Adityavikram Singhania and a team of experienced personnel. Long experience of the promoters in construction industry has led
to the established position of the company in Madhya Pradesh and Chhattisgarh region.

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Complete definition of the ratings assigned are available at www.careedge.in and other CARE Ratings Ltd.’s publications
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Stable total operating income albeit dip in PBIDT margins in FY21:

TBPL’s total operating income remained stable at Rs.249.28 cr in FY21 as against Rs. 249.90 cr in FY20. The PBILDT margin
declined from 12.48% in FY20 to 10.70% in FY21. The PAT margin improved from 3.91% in FY20 to 4.32% in FY21 on account
of lower depreciation.

Healthy order book position albeit more than 90% of outstanding order book being derived only from two
projects The Company had outstanding order book of Rs.643.26 crore as on Sep 30, 2019 which is 3.27x of gross billing in
FY19, ensuring revenue visibility over the medium term. However, around 93% of outstanding order is derived from two large
sized projects. The company has received orders from GVR Infra Projects Ltd (GIPL) on back to back basis wherein 70%
payments would be received directly and remaining 30% would be routed through escrow a/c from the main principals
(MPRDC, Bhopal & PWD, Raipur).

Proven project execution capabilities with reputed clientele

The Company has a satisfactory contract completion track record. Repetitive orders received from its existing clients
corroborate TBPL’s proven project execution capability. TBPL is registered as a Class–I-A contactor with PWD of Madhya
Pradesh and Chhattisgarh. Further it can bid for projects floated by Public Works Department (PWD) and Water Resource
Department (WRD) of Madhya Pradesh and Chhattisgarh, Madhya Pradesh Road Development Corporation (MPRDC), Madhya
Pradesh Power Generation Authority Limited, Madhya Pradesh Rural Road Development Corporation & National Highway
Authority of India (NHAI).

Escalation clause attached to most of the contracts

The raw material & labour cost forms the major chunk of the total cost of sales. The same are volatile in nature and impact
profitability. However, the TBPL mitigates this risk by way of cost escalation clause in all contracts as all are longer tenure
contracts (ranging from 2-5 years). All current contracts in hand have in-built escalation clause. Also, in case of delay in any of
the contracts due to adverse weather conditions or delay on the part of the client, the additional cost incurred is passed on and
the company also gets extension in project timeline

Satisfactory financial risk profile

The overall gearing of the company was comfortable at 0.18x as on March 31, 2021 on account of healthy networth, accretion
of profit to reserves and lower dependency of fund based working capital requirement. Further, total debt/GCA was moderate
and stood at 2.15x in FY21 (including mobilisation advances).

Large fleet of owned equipment

The Company has added latest machinery required for executing projects every year commensurate with the increase in the
scale of operations. Adjusted gross bock of tangible assets stood at Rs.89.22 crore (excluding fair market value of quarry of
solid black basalt material) as on March 31, 2019 as against Rs.72.67 crore as on March 31, 2018 on the back of investment in
the equipment and machinery. Large investment in machinery and efficient deployment of resources helps company in timely
execution of projects and expansion in profitability margins as it reduces its reliance on sub-contractors.

Analytical approach: Standalone

Applicable Criteria
Policy in respect of Non-cooperation by issuer
Policy on default recognition
Financial Ratios – Non financial Sector
Liquidity Analysis of Non-financial sector entities
Rating Outlook and Credit Watch
Construction
Policy on Withdrawal of Ratings

About the Company

TBPL was promoted as a partnership firm in 1983 by Kolkata based Mr. Padam Singhania which was subsequently reconstituted
as a private limited company in 2003. TBPL is engaged in executing construction contracts for infrastructure development
projects mainly roads, bridge, irrigation projects for Public Works Department (PWD) and Water Resource Department (WRD) of
Madhya Pradesh and Chhattisgarh, Madhya Pradesh Road Development Corporation (MPRDC), Madhya Pradesh Power
Generation Authority Limited, Madhya Pradesh Rural Road Development Corporation, National Highway Authority of India
(NHAI) etc. The company is registered as Class I-A contractor with PWD of Madhya Pradesh and Chhattisgarh
Brief Financials (Rs. crore) 31-03-2020 (A) 31-03-2021 (A) 9MFY22 (UA)
Total operating income 249.90 249.28 NA
PBILDT 31.18 26.67 NA
PAT 9.76 10.75 NA
Overall gearing (times) 0.49 0.18 NA
Interest coverage (times) 4.98 4.23 NA
A: Audited, UA: Unaudited, NA: Not Available

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Status of non-cooperation with previous CRA: Not Applicable

Any other information: Not Applicable

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

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

Complexity level of various instruments rated for this company: Annexure 4

Annexure-1: Details of Instruments / Facilities

Size of the
Name of the Date of Coupon Maturity Rating assigned along
ISIN Issue
Instrument Issuance Rate Date (Rs. crore) with Rating Outlook
Fund-based - LT-Cash
- - - 0.00 Withdrawn
Credit
Non-fund-based - LT/ ST-
- - - 0.00 Withdrawn
Bank Guarantee
Fund-based - LT-Term
- - - 0.00 Withdrawn
Loan

Annexure-2: Rating History of last three years

Current Ratings Rating history
Date(s) &
Name of the Amount Date(s) & Date(s) & Date(s) &
Sr. Rating(s)
Instrument/Ban Ty Outstandin Ratin Rating(s) Rating(s) Rating(s)
No. assigned
k Facilities pe g (Rs. g assigned in assigned in assigned in
in 2019-
crore) 2022-2023 2021-2022 2020-2021 2020
1)CARE BB; 1)CARE BB+;
Stable; ISSUER Stable; ISSUER 1)CARE
Fund-based - LT-
1 LT - - NOT - NOT BBB; Stable
Cash Credit
COOPERATING* COOPERATING* (04-Feb-20)
(26-Apr-22) (02-Feb-21)
1)CARE BB+;
1)CARE BB;
Stable / CARE 1)CARE
Non-fund-based - Stable / CARE
LT/ A4+; ISSUER BBB; Stable
2 LT/ ST-Bank - - A4; ISSUER NOT -
ST* NOT / CARE A3+
Guarantee COOPERATING*
COOPERATING* (04-Feb-20)
(26-Apr-22) (02-Feb-21)
1)CARE BB; 1)CARE BB+;
Stable; ISSUER Stable; ISSUER 1)CARE
Fund-based - LT-
3 LT - - NOT - NOT BBB; Stable
Term Loan
COOPERATING* COOPERATING* (04-Feb-20)
(26-Apr-22) (02-Feb-21)
* Long Term / Short Term

Annexure-3: Detailed explanation of covenants of the rated instrument / facilities- Not Applicable

Annexure 4: Complexity level of various instruments rated for this company

Sr. No Name of instrument Complexity level
1 Fund-based - LT-Cash Credit Simple
2 Fund-based - LT-Term Loan Simple
3 Non-fund-based - LT/ ST-Bank Guarantee Simple

Annexure 5: Bank Lender Details for this Company

To view the lender wise details of bank facilities please click here

Note on complexity levels of the rated instrument: CARE Ratings Ltd. has classified instruments rated by it on the basis of
complexity. Investors/market intermediaries/regulators or others are welcome to write to care@careedge.in for any clarifications.

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Contact us
Media Contact
Name: Mr. Mradul Mishra
Contact no.: +91-22-6754 3573
Email ID: mradul.mishra@careedge.in

Analyst Contact
Name: Mr. Punit Singhania
Contact no. : 98743 41122
Email ID: punit.singhania@careedge.in

Relationship Contact
Name: Mr. Lalit Sikaria
Contact no. :+ 91-033- 40181600
Email ID: lalit.sikaria@careedge.in

About CARE Ratings Limited:

Established in 1993, CARE Ratings Ltd. is one of the leading credit rating agencies in India. Registered under the Securities and
Exchange Board of India (SEBI), it has also been acknowledged as an External Credit Assessment Institution (ECAI) by the
Reserve Bank of India (RBI). With an equitable position in the Indian capital market, CARE Ratings Limited provides a wide
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knowledge and assessment provided by the company.
With an established track record of rating companies over almost three decades, we follow a robust and transparent rating
process that leverages our domain and analytical expertise backed by the methodologies congruent with the international best
practices. CARE Ratings Limited has had a pivotal role to play in developing bank debt and capital market instruments including
CPs, corporate bonds and debentures, and structured credit.

Disclaimer
The ratings issued by CARE Ratings Limited 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. These ratings do not convey suitability or price for the investor. The agency does not constitute an
audit on the rated entity. CARE Ratings Limited has based its ratings/outlooks based on information obtained from reliable
and credible sources. CARE Ratings Limited does not, however, guarantee the accuracy, adequacy or completeness of any
information and is not responsible for any errors or omissions and the results obtained from the use of such information.
Most entities whose bank facilities/instruments are rated by CARE Ratings Limited have paid a credit rating fee, based on the
amount and type of bank facilities/instruments. CARE Ratings Limited or its subsidiaries/associates may also be involved with
other commercial transactions with the entity. In case of partnership/proprietary concerns, the rating /outlook assigned by
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