Press Release Paranjape Schemes (Construction) …

1 1 CARE Ratings Limited Press Release Paranjape Schemes ( construction ) Limited April 24, 2018 Ratings Facilities Amount (Rs. crore) Rating1 Rating Action Non-Convertible Debentures CARE BB+; ISSUER NOT COOPERATING (Double B Plus; ISSUER NOT COOPERATING) Revised from CARE BBB; Issuer Not Cooperating (Triple B; Issuer Not Cooperating) based on best available information Fixed Deposits CARE BB+(FD); ISSUER NOT COOPERATING (Double B Plus(Fixed Deposits); ISSUER NOT COOPERATING) Revised from CARE BBB (FD); Issuer Not Cooperating (Triple B (Fixed Deposits); Issuer Not Cooperating based on best available information Total (Rs. Two hundred and thirty crore only) Details of instruments/facilities in Annexure-1 Detailed Rationale & Key Rating Drivers CARE has revised the ratings from CARE BBB; Issuer Not Cooperating(Triple B; Issuer Not Cooperating)/ CARE BBB (FD); Issuer Not Cooperating (Triple B (Fixed Deposits); Issuer Not Cooperating to CARE BB+; ISSUER NOT COOPERATING (Double B Plus; ISSUER NOT COOPERATING)/ CARE BB+(FD); ISSUER NOT COOPERATING (Double B Plus(Fixed Deposits); ISSUER NOT COOPERATING) based on best available information.))

2 However, despite our repeated requests via email dated April 18,2018 and numerous phone calls, the company has not provided the requisite information for monitoring the ratings. In the absence of minimum information required for the purpose of rating, CARE is unable to express opinion on the rating. In line with the extant SEBI guidelines CARE s rating on Paranjape Schemes ( construction ) Limited,Non Convertible Debentures and Fixed Deposits will now be denoted as CARE BB+; ISSUER NOT COOPERATING and CARE BB+(FD); ISSUER NOT COOPERATING. The revision in the ratings is on account of deterioration in the financial risk profile of the company marked by reduced scale of operations,losses at operating and net level leading to erosion of networth and deterioration in the capital structure for period ended September 30,2017.

3 The ratings continue to factor in well-established & experienced promoters having proven track record in the real estate industry. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating(s). Detailed description of the key rating drivers Key Rating Strengths Experienced promoters with long track record coupled with geographical diversification The Paranjape group is in the real estate business since 1930 and PSCL is in the existence since 1987. The current directors of the company are Mr Shrikant Paranjape and Mr Shashank Paranjape having an experience of over two decades in the real estate business. Key Rating Weakness Financial risk profile marked by deteriorating profitability margins and capital structure during H1FY18.

4 1 Complete definitions of the ratings assigned are available at and in other CARE publications. 2 CARE Ratings Limited Press Release During H1FY18 PSCL made an operating level losses to the tune of crore ( profit of crore) and registered a net loss of crore ( profit of crore).The same can largely be attributed to overall slowdown in real estate industry and revenues of the company also declined from crore in H1FY17 to crore during H1FY18. Further, the overall gearing deteriorated to as on September 30, 2017 on account of increase in the total debt for the company to crore and erosion in Networth to as on September 30,2017 as against crore as on September 30,2016.

5 Inherent cyclical nature of the real estate sector The real estate sales in the residential segment have remained tepid and unsold inventory has further increased in the major cities. To support the ailing real estate sector, various measures such as relaxation of FDI norms, passage of Real Estate Bill, etc, have been undertaken in the right direction. Although the interest rates have moderated, buyer sentiments are yet to improve. Any adverse impact due to macro- economic factors including slow down and adverse regulatory changes may have an impact on the sales velocity and thus impact cash flow of the companies operating in the real estate sector. Analytical approach: Standalone Applicable Criteria Policy in respect of Non-cooperation by issuer Criteria on assigning Outlook to Credit Ratings CARE s Policy on Default Recognition Criteria for Short Term Instruments About the Company Brief Financials (Rs.)

6 Crore) FY16 (A) FY17 (A) H1FY18 (UA) Total operating income PBILDT PAT Overall gearing (times) Interest coverage (times) A: Audited; UA: Unaudited Incorporated in 1987, Paranjape Schemes construction Limited (PSCL) is in the business of real estate development, both residential and commercial. The company has undertaken real estate projects in Pune, Mumbai, Chiplun, Kolhapur and Bangalore. The group has completed over 160 projects with total saleable area of 153 lakh square feet (lsf) (~85% residential and 15% commercial) till September 30, 2015. These projects were 67% funded through customer advances. The company has shown reasonable execution capability; moreover the major funding being advance from customers indicate company s ability to market the projects during construction period and maintain high collection efficiency.

7 Status of non-cooperation with previous CRA: CRISIL has migrated the ratings of Paranjape Schemes ( construction ) Limited to ISSUER NOT COOPERATING vide its Press Release dated March 22,2018. Rating History for last three years: Please refer Annexure-2 Note on complexity levels of the rated instrument: CARE has classified instruments rated by it on the basis of complexity. This classification is available at Investors/market intermediaries/regulators or others are welcome to write to for any clarifications. Analyst Contact: Name: Mr. Aniruddha Mate Tel: 020- 40009007 Mobile: 9970613934 Email: **For detailed Rationale Report and subscription information, please contact us at 3 CARE Ratings Limited Press Release About CARE Ratings: CARE Ratings commenced operations in April 1993 and over two decades, it has established itself as one of the leading credit rating agencies in India.

8 CARE is registered with the Securities and Exchange Board of India (SEBI) and also recognized as an External Credit Assessment Institution (ECAI) by the Reserve Bank of India (RBI). CARE Ratings is proud of its rightful place in the Indian capital market built around investor confidence. CARE Ratings provides the entire spectrum of credit rating that helps the corporates to raise capital for their various requirements and assists the investors to form an informed investment decision based on the credit risk and their own risk-return expectations. Our rating and grading service offerings leverage our domain and analytical expertise backed by the methodologies congruent with the international best practices. Disclaimer CARE s ratings are opinions on credit quality and are not recommendations to sanction, renew, disburse or recall the concerned bank facilities or to buy, sell or hold any security.

9 CARE has based its ratings/outlooks on information obtained from sources believed by it to be accurate and reliable. CARE does not, however, guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. Most entities whose bank facilities/instruments are rated by CARE have paid a credit rating fee, based on the amount and type of bank facilities/instruments. In case of partnership/proprietary concerns, the rating /outlook assigned by CARE is based on the capital deployed by the partners/proprietor and the financial strength of the firm at present. The rating/outlook may undergo change in case of withdrawal of capital or the unsecured loans brought in by the partners/proprietor in addition to the financial performance and other relevant factors.

10 Annexure-1: Details of Instruments/Facilities Name of the Instrument Date of Issuance Coupon Rate Maturity Date Size of the Issue (Rs. crore) Rating assigned along with Rating Outlook Fund-based - LT-Term Loan - - - Withdrawn Fund-based - LT-Cash Credit - - - Withdrawn Non-fund-based - ST-Bank Guarantees - - - Withdrawn Debentures-Non Convertible Debentures - - - CARE BB+; ISSUER NOT COOPERATING* Issuer not cooperating; Revised from CARE BBB; ISSUER NOT COOPERATING* on the basis of best available information Fixed Deposit - - - CARE BB+ (FD); ISSUER NOT COOPERATING* Issuer not cooperating; Revised from CARE BBB (FD); ISSUER NOT COOPERATING* on the basis of best available information 4 CARE Ratings Limited Press Release Annexure-2: Rating History of last three years Sr.