The credit ratings upgrade identify with various factors in the development with respect to successful implementation of plans and efforts put forward by Macrotech Developers to improve their performance in warehousing segment through land monetization, Brickwork Ratings said
Brickwork Ratings India has recently upgraded the ratings of various bank loan facilities and non-convertible debentures (NCD) of Macrotech Developers also known as Lodha Group.
The agency has upgraded the company’s long-rating for fund based loans to BWR A-/Stable from BWR BBB+/Stable while also upgrading the long term NCD ratings to BWR A-/Stable and BWR BBB+/Stable from BWR BBB+/ Stable and BWR BBB/Stable, respectively.
Their rating upgrade identifies various factors in the development with respect to the successful implementation of plan and effort put forward by Macrotech Developers to improve their performance in the warehousing segment through land monetization, Brickwork Ratings said.
The Macrotech Developers has made a collaborative agreement with a leading e-commerce company for leasing a 1.2 million sq. ft. built-up area with a total land area of 40 acres.
The upgrade in rating factors things such as satisfactory performance in respect to sales and collections done in the second quarter as well. This performance is expected to remain satisfactory in the future in respect to continuous development in the real estate sector for the coming festival season.
The ratings of the agency have also considered the track record of the company and dominant position in the market, its land bank reserves, project development abilities done over the years, effective branding in Mumbai Metropolitan Region (MMR), experienced leadership and management team, availability of completed and near-completed projects, and efforts taken by the company to reduce debt and deleverage the balance sheet.
The diversity in the project portfolio in multiple phases with different price points is something that the agency takes into consideration to calculate the rating.
The rating also takes notice of the real estate process cycle, risks in project execution, high inventories level and debt. However, the rating agency Brickwork Ratings found that Macrotech Developers has dedicated plans to reduce debt levels over a 2-year schedule and they are successfully heading in that direction.
The Outlook has revised the ratings from Negative to Stable on the successful integration of IPO, and this continues to be Stable by looking at improvement in conditions of the market, the rating agency said.
First Published by– Kailash Babar
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