Rating agency Crisil has downgraded bank facilities of two subsidiaries of Gayatri Projects — Gayatri Lalitpur Roadways Ltd and Gayatri Jhansi Roadways Ltd — due to delays in receiving payments from NHAI.
The agency has downgraded the ratings on the bank facilities of Gayatri Lalitpur Roadways (GLRL) to ’BBB-(SO)/Stable’ from ‘A- (SO)/Stable’
It downgraded the rating on bank facility of Gayatri Jhansi Roadways (GJRL) to ‘BB+ (SO)/Stable’ from ’A-(SO)/Stable’
Crisil said the downgrade of banking facilities of the two companies reflects deterioration in their liquidity because of delays in receipt of annuities from the National Highways Authority of India (NHAI).
Both the companies have received four annuities till date from NHAI, each of them with delays of 30 to 90 days, Crisil said.
The delays have constrained the two companies’ liquidity and repayment capabilities, it said.
Company sources said as per the concession agreement, NHAI would release annuities within 90 days. “Both the companies have received annuities from NHAI within 90 days. There is no delay,” the sources said.
Crisil said that the downgrade also reflects expected further deterioration in GLRL’s liquidity over the medium term because of part utilisation of future annuities to meet the remaining cost for completing the project.
“The downgrade also reflects the expected deterioration in GJRL’s liquidity over the medium term because of utilisation of one full annuity to meet the remaining cost in completing the project,” Crisil said in case of GJRL.
GLRL is a special-purpose vehicle promoted by Gayatri Projects Ltd and Infrastructure Development Finance Company Ltd to design, develop, construct, operate, and maintain a road stretch of 49.305 km on NH26 in Uttar Pradesh. Gayatri Projects holds 51 per cent stake in it.
In GJRL, GPL has 51 per cent stake and IDFC has 49 per cent. The project is to design, develop, construct, operate, and maintain a 49.7-km stretch of road between Jhansi and Lalitpur in UP on NH-25 and NH-26 on build-own–operate basis.
CRISIL believes that liquidity positions will remain constrained over the medium term because of the delays in receipt of annuities from NHAI.
The outlook may be revised to ‘Positive’ in case the companies witness timely receipt of annuity from NHAI over the medium term.