Brickwork Ratings (BWR) has assigned the rating of ‘BWR A' with a stable outlook for the proposed NCD Issue of Peninsula Land Limited (PLL) of Rs 200 Crores. Instruments with this rating are considered to have adequate degree of safety regarding timely servicing of financial obligations. Such instruments carry low credit risk.
The rating factors experienced promoter group, Company's established brand name in Mumbai real estate market, revenue visibility from potential sale of completed commercial office space project (Peninsula Business Park at Lower Parel, Mumbai), profitability margins, moderate leverage and residential projects in pipeline. However, the rating is constrained by project execution risk arising from large scale development work undertaken by the company, low debt protection metrics due to significant debt repayments due in FY13 & FY14 and the current economic conditions. The ability of the company to successfully execute its on-going projects together with improvement in capital structure are the key rating sensitivities. Details of the issues of the Company rated by BWR including the aforementioned are as under| Instrument | Amount | Rating | Assigned/Reaffirmed | Rating History | |
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| Review As on | Rating As on |
| NCD II | Rs. 200 crore | BWR A)(Stable) | Assigned | BWR A (Stable)November 2012 | |
| NCD I | Rs.100 crore | BWR A(Stable) | Reaffirmed | BWR A (Stable)August, 2012 |
Company Background: PLL, part of the Ashok Piramal group, ventured into real estate business by utilizing the land reserves to develop commercial office space and residential projects. The Company develops residential projects under the brand name ‘Ashok', commercial projects under the brand name ‘Peninsula' and retail projects under the brand name ‘Cross roads'. While the Company has so far developed and executed 6.4 mn square feet across all the segments, it currently has 21 mn square feet in pipeline including 1.95 mn sq ft (PLL's share) under active development. The company has entered into an agreement with HEM Bhattad to develop property for residential purpose in Central Mumbai. The said property measuring approximately 19 acres is located at Sewree. PLL's board comprised two promoter directors, one non-executive non-independent director, one executive director and seven non-executive independent directors. Recently, Mr. Rajesh Jaggi, Managing Director has resigned from the company. Mr. Rajeev Piramal, Executive Vice-Chairman has taken over the additional responsibility of MD of the company and has been re-designated as Vice-Chairman and Managing Director. On a consolidated basis, PLL reported a profit after Tax (PAT) of Rs. 151.44 crore on a total income of Rs. 532.29 crore in FY 12 as compared to PAT of Rs. 194.28 crore on a total income of Rs.500.95 crore in FY11. PLL's PAT (on a standalone basis) almost doubled to Rs.124.65 crore on a total income of Rs.420.17 crore for the half year ended September 2012 as compared to Rs.63.62 crore on a total income of Rs.155.45 crore for the same period last year. Disclaimer: Brickwork Ratings (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 The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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