New Delhi: Credit rating agency ICRA has awarded BBB+ with a Stable Outlook rating to Gaurs Group (also known as Gaursons India), one of the leading real estate developers. The rating upgrade reflects the reduction in Gaurs Group’s debt levels, which coupled with the healthy execution and the continued sales momentum in ongoing performance, has improved the Group’s cash flow adequacy ratio.
The Group said the rating given is based on strong listing due to timely payment to banks, strong receivables, and timely deliveries. The rating reflects ICRA’s expectation that the financial and operational risk profile of the group will remain strong, going forward, driven by its established market position in the real estate sector. While arriving at the rating, ICRA has taken a consolidated view on the Gaurs Group, of which Gaursons Hi-Tech Infrastructure Private Limited (GHPL) is a part, given the strong operational, managerial and financial linkages among the companies. Further, Gaursons India (P) Limited (GIPL) has extended unconditional and irrevocable guarantees for the bank debt raised by the subsidiary companies. The group has recently been awarded four tenders from state-run NBCC worth Rs 2,124 crore for completing stuck Amrapali projects with a total inventory of 10,964 flats. This has resulted in its book growing by a healthy Rs 2200 crore for three years; which will surely add teeth to the strong financials.
During the challenging times of COVID-19, the Group has repaid loans of around Rs 400 crores to various financial institutions. Commenting on the encouraging rating, Manoj Gaur, CMD, Gaurs Group said, “The rating is a seal of approval for the greatest level of security in terms of meeting financial commitments on time and delivering on our promises. We are committed to delivering quality projects on time and will continue to contribute positively towards the development of the country’s infrastructure. It is very satisfying to share that we have delivered close to 35000 property units in the last 5 years which has been the pivot in the company’s growth.”
The Group has delivered more than 60 million sqft area across 65+ projects and is very bullish on the future too. Talking about the plans, Sarthak Gaur, Director, Gaurs Group, said, “We would soon be launching three to four new projects in Noida, Delhi and Ghaziabad. We are looking forward to foraying into luxury housing. We were working on establishing our commercial footprints in the last 2-3 years and also in completing the projects on the floor including the mammoth Gaur City township. Now that those aims have been achieved, it is time to launch new projects to add to the strong commitment towards real estate growth in Delhi NCR.”
Vineet Singhal, Group CFO, Gaurs Group, says, “The rating takes into account the Group’s better-than-expected financial performance, as seen by the company’s healthy revenue growth, increased operating profits, and improved profit margins. The Group’s great performance has continued, with the company achieving its best-ever results in recent years. Profitability and accruals are expected to support growth in the current fiscal year, as well as the development of a sizable portfolio, which will increase the company’s financial flexibility. We should further see a reduction in debt in the next 9-months by around ₹500 crores as more big-ticket projects will reach completion.”
The rating also took into account the strong market position and diversified project portfolio of the Group, particularly in Ghaziabad and Noida.
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