Rating Advisory

November 12, 2019 | Mumbai A dar sh Bi r m echaO r i gi nal Tem pl at e123

P.V. Infra Projects Private Limited

Advisory as on November 12, 2019

This rating advisory is provided in relation to the rating of P.V. Infra Projects Private Limited

The key rating sensitivity factors for the rating include:

 Working capital and liquidity management

 Improvement in scale of operations and profitability
 Capital expenditure (capex) plans and funding pattern

CRISIL Ratings has a policy of keeping its accepted ratings under constant and ongoing
monitoring and review. Accordingly, it seeks regular updates from companies on business and
financial performance. CRISIL is yet to receive adequate information from P.V. Infra Projects
Private Limited (PVIPL) to enable it to undertake a rating review. CRISIL is taking all possible
efforts to get the rated entity to cooperate with its rating process for enabling it to carry out the
rating review.

CRISIL views information availability risk as a key factor in its assessment of credit risk. (Please
refer to CRISIL Ratings publication dated April 30, 2012 - 'Information Availability - a key risk
factor in credit ratings')

If PVIPL continues to delay the provisioning of information required by CRISIL to undertake a

rating review then, in accordance with circular SEBI/HO/MIRSD/MIRSD4/CIR/P/2016/119 dt Nov
1, 2016 and SEBI/HO/MIRSD/ MIRSD4/ CIR/ P/ 2017/ 71 dt June 30, 2017 issued by Securities
and Exchange Board of India, CRISIL will carry out the review based on best available
information and issue a press release.

About the Company

Incorporated in 2009, by Mr. Uday Bhanu Samineni and Mr. Samineni Venkata Krishna Prasad,
PVIPL, undertakes civil construction activity for Public Works Department in Andhra Pradesh.

Please note: This advisory should not be construed as a rating reaffirmation.

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information on any instrument of any company rated by CRISIL you may contact CRISIL RATING DESK at [email protected], or at
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 Rating Rationale
August 24, 2018 | Mumbai

P.V. Infra Projects Private Limited

'CRISIL B/Stable/CRISIL A4' assigned to bank debt

Rating Action
Total Bank Loan Facilities Rated Rs.10 Crore
Long Term Rating CRISIL B/Stable (Assigned)
Short Term Rating CRISIL A4 (Assigned)
1 crore = 10 million
Refer to annexure for Details of Instruments & Bank Facilities

Detailed Rationale
CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' ratings to the bank facilities of P.V. Infra Projects Private
Limited (PVIPL). The ratings reflect modest scale of operations in intensely competitive industry, large working capital
requirement and subdued debt protection metrics. These weaknesses are partially offset by extensive experience of
PVIPL's promoter in the civil construction industry, healthy order book and moderate capital structure.

Analytical Approach
CRISIL has treated unsecured loans from promoters as debt, since these are not subordinated to bank debt.

Key Rating Drivers & Detailed Description

Weaknesses
* Modest scale of operations: Scale of operations is small with revenue of Rs 12.87 crore in fiscal 2018. The
segment is highly fragmented and has numerous small-scale unorganised players catering to local demand, which
may restrict significant improvement in scale of operations and constrain profitability.

* Large working capital requirements: Operations are working capital intensive, as reflected in gross current
assets of 427 days as on March 31, 2018, on account of stretched receivables cycle of around 315 days. Further,
need to provide earnest money, security deposit, and bank guarantees, augments working capital requirements. .

* Subdued debt protection metrics: PVIPL has recorded subdued debt protection metrics marked by interest
coverage ratio of 1.4 times and net cash accruals to total debt of 0.05 time in fiscal 2018.

Strengths
* Extensive experience of the promoter: Benefits derived from the promoter's extensive experience of around a
decade should continue to support the business. The company has healthy order book of Rs 30 crore as of July 2018
to be executed over the next 24 months, which gives revenue visibility over the medium term.

* Average capital structure: PVIPL's capital structure is marked by moderate gearing of 1.09 times and total
outside liabilities to adjusted tangible networth of 2.38 times as on March 31, 2018. CRISIL expects the capital
structure to remain at similar level for the near term.
Outlook: Stable
CRISIL believes PVIPL will continue to benefit over the medium term from the experience of the promoter. The
outlook may be revised to 'Positive' if sustained increase in scale of operations, profitability, and cash accrual
strengthens financial risk profile and liquidity. Conversely, the outlook may be revised to 'Negative' if sizeable working
capital requirement, decline in revenue or profitability, or large, debt-funded capital expenditure weakens financial
risk profile and liquidity.

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About the Company
Incorporated in 2009, by Mr. Uday Bhanu Samineni and Mr. Samineni Venkata Krishna Prasad, PVIPL, undertakes
civil construction activity for Public Works Department in Andhra Pradesh.

Key Financial Indicators

Particulars Unit 2018* 2017
Revenue Rs. Cr. 12.87 0.80
Profit After Tax Rs. Cr. 0.26 NA
PAT Margins % 2.1 0.4
Adjusted Debt/Adjusted Net worth Times 1.09 0.65
Interest coverage Times 1.41 3.41
*provisional

Any other information: Not applicable

Note on complexity levels of the rated instrument:

CRISIL complexity levels are assigned to various types of financial instruments. The CRISIL complexity levels are
available on www.crisil.com/complexity-levels. Users are advised to refer to the CRISIL complexity levels for instruments that
they consider for investment. Users may also call the Customer Service Helpdesk with queries on specific
instruments.

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3
Annexure - Details of Instrument(s)
Issue Rating
Date of Coupon Maturity
ISIN Name of Instrument Size Assigned with
Allotment Rate (%) Date
(Rs. Cr) Outlook

NA Secured Overdraft Facility NA NA NA 4.5 CRISIL B/Stable

NA Bank Guarantee NA NA NA 2 CRISIL A4

Proposed Long Term Bank

NA NA NA NA 3.5 CRISIL B/Stable
Loan Facility

Annexure - Rating History for last 3 Years

Start of
Current 2018 (History) 2017 2016 2015
2015

Outstanding
Instrument Type Rating Date Rating Date Rating Date Rating Date Rating Rating
Amount

Fund-based Bank LT/S CRISIL

8.00 -- -- -- -- --
Facilities T B/Stable

Non Fund-based LT/S CRISIL

2.00 -- -- -- -- --
Bank Facilities T A4
All amounts are in Rs.Cr.

Annexure - Details of various bank facilities

Current facilities Previous facilities
Amount Amount
Facility Rating Facility Rating
(Rs.Crore) (Rs.Crore)
Secured Overdraft CRISIL
4.5 -- 0 --
Facility B/Stable
Bank Guarantee 2 CRISIL A4 -- 0 --
Proposed Long Term CRISIL
3.5 -- 0 --
Bank Loan Facility B/Stable
Total 10 -- Total 0 --

Links to related criteria

CRISILs Approach to Financial Ratios
CRISILs Bank Loan Ratings - process, scale and default recognition
Rating criteria for manufaturing and service sector companies

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This disclaimer forms part of and applies to each credit rating report and/or credit rating rationale that we provide (each a “Report”). For the avoidance of doubt, the term
“Report” includes the information, ratings and other content forming part of the Report. The Report is intended for the jurisdiction of India only. This Report does not
constitute an offer of services. Without limiting the generality of the foregoing, nothing in the Report is to be construed as CRISIL providing or intending to provide any
services in jurisdictions where CRISIL does not have the necessary licenses and/or registration to carry out its business activities referred to above. Access or use of this
Report does not create a client relationship between CRISIL and the user.

We are not aware that any user intends to rely on the Report or of the manner in which a user intends to use the Report. In preparing our Report we have not taken into
consideration the objectives or particular needs of any particular user. It is made abundantly clear that the Report is not intended to and does not constitute an investment
advice. The Report is not an offer to sell or an offer to purchase or subscribe for any investment in any securities, instruments, facilities or solicitation of any kind or
otherwise enter into any deal or transaction with the entity to which the Report pertains. The Report should not be the sole or primary basis for any investment decision
within the meaning of any law or regulation (including the laws and regulations applicable in the US).

Ratings from CRISIL Rating are statements of opinion as of the date they are expressed and not statements of fact or recommendations to purchase, hold, or sell any
securities / instruments or to make any investment decisions. Any opinions expressed here are in good faith, are subject to change without notice, and are only current as
of the stated date of their issue. CRISIL assumes no obligation to update its opinions following publication in any form or format although CRISIL may disseminate its
opinions and analysis. CRISIL rating contained in the Report is not a substitute for the skill, judgment and experience of the user, its management, employees, advisors
and/or clients when making investment or other business decisions. The recipients of the Report should rely on their own judgment and take their own professional
advice before acting on the Report in any way.

Neither CRISIL nor its affiliates, third party providers, as well as their directors, officers, shareholders, employees or agents (collectively, “CRISIL Parties”) guarantee the
accuracy, completeness or adequacy of the Report, and no CRISIL Party shall have any liability for any errors, omissions, or interruptions therein, regardless of the
cause, or for the results obtained from the use of any part of the Report. EACH CRISIL PARTY DISCLAIMS ANY AND ALL EXPRESS OR IMPLIED WARRANTIES,
INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. In no event
shall any CRISIL Party be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses,
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the possibility of such damages.

CRISIL Ratings may receive compensation for its ratings and certain credit-related analyses, normally from issuers or underwriters of the instruments, facilities, securities

5
or from obligors. CRISIL’s public ratings and analysis as are required to be disclosed under the regulations of the Securities and Exchange Board of India (and other
applicable regulations, if any) are made available on its web sites, www.crisil.com (free of charge). Reports with more detail and additional information may be available
for subscription at a fee – more details about CRISIL ratings are available here: www.crisilratings.com.

CRISIL and its affiliates do not act as a fiduciary. While CRISIL has obtained information from sources it believes to be reliable, CRISIL does not perform an audit and
undertakes no duty of due diligence or independent verification of any information it receives and / or relies in its Reports. CRISIL keeps certain activities of its business
units separate from each other in order to preserve the independence and objectivity of the respective activity. As a result, certain business units of CRISIL may have
information that is not available to other CRISIL business units. CRISIL has established policies and procedures to maintain the confidentiality of certain non-public
information received in connection with each analytical process. CRISIL has in place a ratings code of conduct and policies for analytical firewalls and for managing
conflict of interest. For details please refer to: https://www.crisil.com/en/home/our-businesses/ratings/regulatory-disclosures/highlighted-policies.html

CRISIL’s rating criteria are generally available without charge to the public on the CRISIL public web site, www.crisil.com. For latest rating information on any instrument
of any company rated by CRISIL you may contact CRISIL RATING DESK at [email protected], or at (0091) 1800 267 1301.

This Report should not be reproduced or redistributed to any other person or in any form without a prior written consent of CRISIL.

All rights reserved @ CRISIL