It has upgraded long-term ratings for the company’s fund-based loans to BWR A-/Stable from BWR BBB+/Stable, while upgrading the long-term rating of NCD to BWR A-/ Stable and BWR BBB+/Stable from BWR BBB+/Stable and BWR BBB/Stable, respectively.
The rating upgrade factors in the positive developments with respect to implementation of the plans envisaged and efforts of Macrotech Developers to gain traction in the warehousing segment through land monetization, Brickwork Ratings said.
The developer has entered into definite agreements with one of the leading ecommerce players for leasing 1.2 million sq ft built up space with total land area of 40 acres.
The upgrade also factors in the continuing satisfactory performance with respect to sales and collections in the second quarter as well and is expected to remain satisfactory going forward in view of continuing improvement in the real estate sector in the upcoming festive season.
The ratings continue to factor in group’s established track record and dominant position in the real estate industry, land bank reserves, project execution capabilities developed over the years, strong brand presence in Mumbai Metropolitan Region (MMR), experienced leadership, professional management team and availability of completed and near completion inventories and various efforts the company has taken to reduce the debt and deleverage the balance sheet.
The comfort is also drawn from diversity of the project portfolio in multiple phases and across multiple price points.
As constraining factors, the ratings take cognizance of exposure to real estate cyclicality, project execution risk, high inventories levels and debt. However, Brickwork Ratings notes that the company has formulated plans for graded reduction in debt levels over a 2-year period and is working in that direction.
The Outlook, which was revised to Stable from Negative on successful conclusion of IPO, continues as Stable in view of the improvement in conditions, the ratings agency said.