Care Ratings grades bank facilities of Ashirbad Nirman Sewa Private Limited; long term and short term facilities worth Rs.89.65 Crore rated

CARE Ratings Nepal Limited (CRNL) has assigned rating of ‘CARE-NP BB’ to the long term bank facilities worth NPR 86.51 Million and ‘CARE-NP A4’ to the short term bank facilities worth NPR 810 Million of Aashirbad Nirman Sewa Private Limited (ANS).

The ratings assigned to the bank facilities of ANS are constrained by small scale of operations with geographically concentrated order book position and tender based nature of operations in highly competitive construction industry. The rating is also constrained by working capital intensive nature of business, planned debt funded capital expenditure and exposure to volatile interest rates.

The ratings, however, derive strength from experienced promoters in related field, moderate track record in executing diverse construction projects and moderate order book position with mid-term revenue visibility. The ratings also factor in financial risk profile marked by growth in the revenue, profitability and satisfactory debt service coverage indicators during FY18 (refers to 12 months’ period ended mid-July 2018), moderate counter party risk and escalation clause in majority of the contracts.

Ability of the company to successfully execute projects in time and recover contract proceeds; and ability of the company to manage healthy revenue growth and maintain profitability margins without deterioration in its financial risk profile will be key rating sensitivities.

Aashirbad Nirman Sewa Private Limited incorporated in March 03, 2015, having registered office in Triyuga-13, Udayapur, is a small-scale construction company in Nepal. The company is promoted by Mr. Keshar Kumar Budhathoki holding 51% of total shares. The company has been involved in construction projects such as buildings, roads, irrigation, water supply etc. across Nepal. ANS also enters into JV with other companies in order to meet the eligibility criteria for the projects.

Source: Care Ratings Nepal