June 28, 2017

Vasundhara Developers
Summary of rated instruments
Instrument* Rated Amount Rating Action
(in crore)
Fund-based – Term Loan 10.00 [ICRA]B (Stable); Reaffirmed
Total 10.00
*Issuer did not co-operate; Based on best available information.
^Instrument Details captured under Annexure-1

Rating action
ICRA has reaffirmed its long term rating assigned to the Rs 10.00 crore fund based facilities of
Vasundhara Developers at [ICRA]B (pronounced ICRA B). The outlook on the long term rating is Stable.

Rationale
The rating action is based on the best available information. As part of its process and in accordance with
its rating agreement with SCPL, ICRA has been trying to seek information from the company so as to
undertake a surveillance of the ratings, but despite repeated requests by ICRA, the company’s
management has remained non-cooperative. In the absence of requisite information, ICRA’s Rating
Committee has taken a rating view based on best available information. In line with SEBI’s Circular No.
SEBI/HO/MIRSD4/CIR/2016/119, dated November 01, 2016, the company’s rating is now denoted as:
“[ICRA]B (Stable) ISSUER NOT COOPERATING”. The lenders, investors and other market
participants may exercise appropriate caution while using this rating, given that it is based on limited or
no updated information on the company’s performance since the time it was last rated.

Key rating drivers

Credit strengths
 Experience of over two decades of partner in the real estate business and a good understanding of the
Vijayawada and Guntur Markets

Credit weaknesses
 High market risk given that around 85% amounting to 47 flats out of 55 are yet to be sold; the
response for the project has been moderate so far with the firm able to achieve 8 bookings in a span of
6 months and also the sales velocity is expected to increase going forward.
 Considerable dependence on customer advances however the firm has bookings only for 8 flats of the
available 55
 Like other real estate players, the firm is exposed to the risk of slowdown in demand, falling property
prices and sluggishness in the sector
 Risks arising from partnership nature of the firm
Description of key rating drivers:

Based in Vijayawada, Vasundhara Developers (VD) is a partnership firm engaged in construction of

residential projects. The promoters of the group have long track record of operations in the field of real
estate and have developed diversified portfolio of projects. VD is developing Vasundhara Orchids in
Vijayawada on a land area of 4360 sq Yards. The proposed project is in Poranki which is about 6 Kms
from centre of Vijayawada and 5 Kms from Prakasam Barrage, 6 Kms from Vijayawada Junction, 7 Kms
from RTC Bus Station and 8Kms from PVR Mall and 20Kms from Gannavaram Airport. The Proposed
site location has been most attractive location for residential apartment in the recent times after formation
of Andhra Pradesh new capital. Vasundhara Developers has entered into a JDA (revenue sharing) with
land owner for the development of 1,19,094 sft of residential project, of which, 72,455 sft is saleable. The
project construction has commenced in February 2015 is planned to be completed by 2016.

Analytical approach: For arriving at the ratings, ICRA has applied its rating methodologies as indicated
below

Links to applicable criteria:

Corporate Credit Ratings: A Note on Methodology

About the firm:

Vasundhara Developers (VD) is a partnership firm founded in 2014 and is engaged in the business of
construction of residential apartments with its head office is located in Guntur District of Andhra Pradesh.
The firm has developed Vasundhara Orchids in Vijayawada on a land area of 4360 sq Yards.

Status of non-cooperation with previous CRA: Not applicable

Any other information: Not applicable

Rating history for last three years:

Table:

S. Name of Current Rating Chronology of Rating History for the past 3

No Instrument years
Type Rated Month-year Month- year Month- year Month- year
(long amount & & Rating in & Rating in & Rating in
term/ (Rs. Rating FY2016 FY2015 FY2013
Short crore)
term)
June 2017 December - -
2015
1 Term Loan LT 10.00 [ICRA]B [ICRA]B - -
(Stable)

Complexity level of the rated instrument:

ICRA has classified various instruments based on their complexity as "Simple", "Complex" and "Highly
Complex". The classification of instruments according to their complexity levels is available on the
website www.icra.in
Annexure-1
Instrument Details

Instrument Date of Coupon Maturity Date Amount Current Rating and

Issuance / Rate Rated Outlook
Sanction (Rs.
crore)
Term Loan November - June 2018 10.00 [ICRA]B (Stable)
2015

Source: Vasundhara Developers

 Contact Details
Analyst Contacts
Srinivasan R
K Ravichandran +91 44 4596 4315
+91 44 4596 4301 [email protected]
[email protected]
Sai Kireeti S K
Nithya Debbadi +91 40 4067 6530
+91 40 4067 6515 [email protected]
[email protected]

Relationship Contact

Jayanta Chatterjee
+91 80 4332 6401
[email protected]

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