RATING RATIONALE

24 Feb 2020

Dinara Datia DPJ-PATHWAYS Pvt. Ltd.

Brickwork Ratings reaffirms the ratings for the Bank Loan Facilities of ₹ 15.21 Crs. of
Dinara Datia DPJ-PATHWAYS Pvt. Ltd.

Particulars:

Amount (₹ Crs.) Rating*

Facilities** Tenure
Previous
Previous Present Present
(12-Dec-2019)
BWR A- (CE) /
Fund Based
15.21 15.21 Long Term BWR A- (CE)^/ ​Stable Negative
Term Loans
Reaffirmed
Total 15.21 15.21 INR Fifteen Crores Twenty One Lakhs Only
Unsupported Rating: BWR BBB-/ Stable
Details of Bank Loan facilities is provided in Annexure- I
^Credit Enhancement (CE) is assigned based on the availability of Corporate Guarantee from the parent
Company/Sponsor Company D P Jain and Co Infrastructure Pvt Ltd.
*Please refer to BWR website ​www.brickworkratings.com/​ for definition of the ratings

RATING ACTION : Reaffirmed

The ratings reaffirmation takes into account the timely receipt of annuities from Madhya Pradesh
Road Development Corporation Limited (MPRDC), experienced management and availability of
corporate guarantee from the sponsor/parent Company D P Jain and Co Infrastructure Pvt Ltd
(DPJ). Also, the ratings derive its strengths from established track record and satisfactory
financial performance of the parent/sponsor company DPJ, availability of the DSRA during the
tenor of the loan and fixed annuities being linked to the escrow mechanism for repayment of
loans. However, the ratings are constrained by an increase in debt levels, inherent maintenance
risks associated with the BOT projects and likelihood of any unexpected/unforeseen delay in
receipt of annuities from MPRDC.

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Outlook :-​ ​Negative

Credit Enhancement (CE) is assigned to the SPV, based on the availability of Corporate Guarantee from
the parent Company/Sponsor Company D P Jain and Co Infrastructure Pvt Ltd.

The outlook of the company has been revised to Negative in line with the revision in outlook from Stable
to Negative of Parent Company - DP Jain & Co Infrastructure Pvt Ltd ​[BWR A / A2 (Negative)]. .The
negative outlook of the parent company reflects the shortfall in bond covenants as per the provisions of
the Debenture Trust Deed for which the company is corresponding with the trustee /investor. The
debenture holder/ investor has informed the company and has pointed out delays in meeting certain
covenants as per the Debenture Trust Deed. In response the company has made certain representations
with respect to bond covenants to the debenture holder, the consideration of which is pending for approval
from the investor/trustee . However the parent company so far has been regular in servicing the coupon
and principal repayment.

The outlook may be revised to Stable once BWR revises the outlook for the parent company.

However the unsupported ratings for the company carry Stable Outlook.

KEY RATING DRIVERS

Credit Strengths:
● Experienced promoters/ Sponsor Company- ​D P Jain & Co Infrastructure Pvt Ltd is
the Sponsor Company, who are also the EPC contractors for the SPV. The Promoters of
D P Jain & Co Infrastructure Pvt Ltd have extensive experience in infrastructure, EPC
and BOT industry.
● Corporate Guarantee : ​Parent/Sponsor Company D P Jain & Co Infrastructure Pvt Ltd
has provided the corporate guarantee to the SPV, wherein if there is any shortfall in the
funds available to the SPV, the parent/sponsor company D P Jain & Co Infrastructure Pvt
Ltd (DPJ) shall arrange the funds to meet the debt obligations on or before the due date.
● Annuity based revenue model with fixed semi-annual annuities from MPRDC - ​The
SPV receives fixed annuities of Rs 3.24 Crs per annum (payable semi-annually) during
July and January every year. The SPV has been receiving annuities from Madhya Pradesh
Road Development Corporation Limited (MPRDC) on time as per schedule.
● Annuity receipts routed through escrow mechanism for servicing of term loan
obligations- ​The annual annuity receipts of Rs 3.24 Crs per annum are being placed in
an escrow account for the repayment of sanctioned term loan.
● Availability of DSRA and MMR - ​Company has created DSRA of ₹ 1.21 Crores as on
31 March 2019. DSRA equivalent to 3 months interest & one principal installment has
been maintained with Dena Bank during the tenor of the loan.. SPV has also created the
Major Maintenance Reserve (MMR) of ₹1.16 Crores as on 31 March 2019
● Satisfactory financial performance of the Sponsor Company- ​DP Jain & Co.
Infrastructure Pvt Ltd (the Sponsor Company) has stable financial profile as seen in
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 strong profitability, modest net worth, comfortable gearing levels and debt protection
metrics. As per FY19 standalone financials, net revenues and PAT stood at ₹ 535.65 Crs
and ₹ 34.29 Crs respectively. Tangible net worth and debt equity reported at ₹ 215.26
Crs and 1.09 X as on March 31, 2019. Interest and Debt service coverage indicators are at
2.59 and 1.49 as on FY19. The unexecuted order book position of the DPJ is at ₹
1665.81 Crs as on 30-Sep-2019, indicating revenue visibility for DPJ in the medium
term.

Credit Risks:

● Inherent maintenance risks associated with BOT projects- ​The SPV is exposed to the
inherent maintenance risks associated with operation of BOT projects.
● Timely receipt of annuities in future- ​The prompt payment of annuity by MPRDC in
future for servicing the loan obligations is another credit risk associated with the project.

ANALYTICAL APPROACH AND APPLICABLE RATING CRITERIA

For arriving at its ratings, BWR has considered the standalone financials of the SPV and the cash
flow from the annuity receipts from MPRDC (Madhya Pradesh Road Development Corporation
Ltd) BWR has assessed the standalone financials upto FY19 and consolidated financials upto
FY19 of the parent/Sponsor Company D P Jain And Co Infrastructure Private Limited (BWR A (
Negative)/A2 ) for determining the credit enhancement of the SPV.

BWR has applied its rating methodology as detailed in the Rating Criteria (hyperlinks provided
at the end of this rationale)

RATING SENSITIVITIES

Going forward, timely receipt of future annuities which is crucial for ensuring the availability of
adequate liquidity of the company to meet the debt repayment and timely availability of the
funds from the sponsor company in case of shortfall shall be key rating sensitivities. The revision
in the outlook of the parent company shall remain a key monitorable

● Stable: ​The outlook may be revised to Stable once BWR revises the outlook for the
parent company

● Positive: ​Substantial reduction in the gearing levels and improvement in the financial
risk profile of the guarantor

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LIQUIDITY INDICATORS

Adequate: ​SPV is generating adequate net cash accruals to repay its debt obligations. SPV is
expected to generate ₹1.60 Crs Cash accruals against the repayment of the ₹1.56 Crs for FY20.
The SPV has already paid the current year installments ahead before the scheduled repayment
date on the receipt of the annuities. Since the annuities received are escrowed to the bank
account, hence, the loan repayment directly from the annuities are received. Also Company has
created Debt Service Retention Account (DSRA) of ₹ 1.21 ​Crores available in the form of Fixed
deposits as on 31 March 2019. These FD’s covers the repayment obligations of 3 months interest
and one principal installment which provides liquidity support for any mismatches in the timing
of the cash flows . Also, the Sponsor/parent Company has provided the Corporate guarantee for
the SPV, wherein if there is any shortfall in the funds available to the SPV, the parent company
D P Jain & Co Infrastructure Pvt Ltd (DPJ) shall arrange the funds to meet the debt obligations
on or before the due date available to the SPV, the sponsor/parent company D P Jain & Co
Infrastructure Pvt Ltd (DPJ) shall arrange the funds to meet the debt obligations on or before the
due date.

SPV’s PROFILE - Dinara Datia DPJ-PATHWAYS Pvt. Ltd.

Dinara Datia DPJ-Pathways Pvt Ltd, a SPV incorporated and owned by D P Jain & Co
Infrastructure and Prakash Asphaltings and Toll Highways (India) Ltd (PATH), has entered into
a 15 year Concession Agreement with Madhya Pradesh Road Development Corporation Limited
(MPRDC) for the Design Build Finance Operate and Transfer (DBFOT) (Annuity basis) of 9 km
long stretch on SH 19 from Datia to Dinara in Madhya Pradesh. The Company had completed
the project on 27th January 2015 and received completion certificate as against the Scheduled
Commercial Operation (COD) of 2nd February 2015.

SPV’s revenue stream is derived from annuity payments. As the Company has achieved COD, it
is entitled to an annuity payment from MPRDC to the tune of Rs 3.24 Crs per year (payable
semi-annually) from 2015 to 2027 subject to the Company’s meeting all the requirements as per
the Concession agreement. Annuity receipts are sufficient for the debt obligations and enable
maintaining adequate debt coverage indicators. As per the sanction terms, the annuity receipts
have to be escrowed to the bank, who has a first charge over the escrow account. The Company
also maintains 3 months interest and one principal instalment for the term of the loan in a DSRA
account. The first Major maintenance as per Concession Agreement is stipulated in the 7th year
(2020) and 8th year (2021) of the Concession agreement. SPV has created MMR (Major
Maintenance Reserve of Rs.1.16 Crs.

The Directors of the SPV are Mr. Prakash Laxmanrao Zilpe and Ms. Vandana Rajesh Gupte.
Both are well qualified and have vast experience in handling the BOT projects
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Till date, the SPV has received Nine (9) annuity payments of ₹1.62 Crores each (₹3.24 crs per
annum payable semi-annually) Jul 2015 to July 2019

SPONSOR COMPANY/PARENT COMPANY - D P Jain & Co Infrastructure Pvt Ltd

D P Jain & Co. Infrastructure Pvt. Ltd was set up in 1974 in Nagpur (Maharashtra) by Mr.
Dharampal Jain and his brother, Mr. Nemichand Jain, both first generation entrepreneurs. It was
re-constituted as a Private Limited Company in December 2004. Currently the business is
managed by Mr Deepak Jain and Mr. Girish Jain, sons of Mr. Dharampal Jain. The company
constructs and widens roads, highways, builds runways and hangars for airport, and also
constructs dams, canals and jack wells in irrigation projects. The company also undertakes the
EPC contracts work for various road projects implemented by its SPVs.DPJ is Class 1A
contractor in Maharashtra and is ISO 9001:2008 certified. The unexecuted order book position of
the DPJ is at ₹ 1665.81 Crs as on 30-Sep-2019.

KEY FINANCIAL INDICATORS

SPV - Dinara Datia DPJ-PATHWAYS Pvt. Ltd. Financials
Key Financial Indicators Units FY18 FY18* FY19*
(GAAP) (Ind AS) (Ind AS)
Result Type Audited Audited Audited
Operating Income ₹ Crores 3.24 3.24 3.24
Operating Profit ₹ Crores 2.94 2.94 2.83
Net Profit ₹ Crores 0.09 0.25 (0.28)
Tangible Net worth ₹ Crores (0.53) (0.37) (0.64)
(Note* :- The SPV has migrated from GAAP and reported the annual results in Ind AS format as on 31st March 2019 and have restated
the results of FY18)

Parent/Sponsor Company - D P Jain & Co Infrastructure Pvt Ltd - Standalone Financials

Key Financial Indicators Units FY18 FY19
Result Type Audited Audited
Operating Income ₹ Crores 468.10 535.65
Operating Profit ₹ Crores 73.52 92.59
Net Profit ₹ Crores 32.06 34.29
Tangible Net worth ₹ Crores 174.83 215.26
Total Debt/ Tangible Net worth Times 1.01 1.09
Current Ratio Times 1.15 1.13

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 KEY COVENANTS OF THE INSTRUMENT/FACILITY RATED : ​The terms of sanction
include standard covenants normally stipulated for bank loan facilities. The lender, Dena Bank
has stipulated for the escrow account for routing its annuities and maintaining DSRA equivalent
to 3 months’ interest and one principal installment obligations. The rated facilities also carries
corporate guarantee from the parent company D P Jain And Co Infrastructure Private Limited
(DPJ).

NON-COOPERATION WITH PREVIOUS CREDIT RATING AGENCY IF ANY : Nil

RATING HISTORY FOR THE PREVIOUS THREE YEARS

Facilities Current Rating Rating History

Tenure
Amount
(Long Term/ Rating 12 Dec-2019 24-May-2019 16 Mar 2018
(₹ Crs.)
Short Term)

Fund BWR A- (CE) / BWR A- (CE) / BWR A- (SO) / BWR A- (SO) /

Long Term 15.21 Negative Stable Stable Stable
Based Reaffirmed Reaffirmed Reaffirmed Reaffirmed

Non Fund
Short Term - -- -- --
Based

Total 15.21 INR Fifteen Crores Twenty One Lakhs Only

COMPLEXITY LEVELS OF THE INSTRUMENTS

For more information, visit ​www.brickworkratings.com/download/ComplexityLevels.pdf

Hyperlink/Reference to applicable Criteria

● General Criteria
● Approach to Financial Ratios
● Infrastructure Sector
● Credit Enhancement

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Analytical Contacts Investor and Media Relations

Nirav A Shah
Analyst
Board: 022 - 28311426 Ext: 676
Liena Thakur
nirav.shah@b​rickworkratings.com
Assistant Vice President - Corporate Communications
+91 84339 94686
Vipula Sharma
liena.t@brickworkratings.com
Director – Ratings
Board: 080 - 40409940 Ext: 330
vipula.s@brickworkratings.com

DINARA DATIA DPJ-PATHWAYS PVT. LTD.

ANNEXURE I
Details of Bank Loan Facilities rated by BWR

Sl. No. Name of the Type of Long Term Short Total

Bank Facilities (₹ Crs.) Term (₹ Crs.​)
(₹ Crs.)

1 Dena Bank Term Loan 15.21 -- 15.21

TOTAL -- 15.21

Total INR Fifteen Crores Twenty One Lakhs only

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country-wide presence with its offices in Ahmedabad, Chandigarh, Chennai, Hyderabad, Kolkata, Mumbai and New
Delhi along with representatives in 150+ locations.

DISCLAIMER: Brickwork Ratings Private Limited (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

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