CARE assigns rating to Ritesh Properties & Industries’ bank facilities

Credit rating agency, CARE has assigned ‘BB+’ rating to Ritesh Properties & Industries’ Long-term bank facilities worth Rs 77 crore. The rating assigned to the bank facilities of Ritesh Properties & Industries is constrained due to the nascent stage of project implementation leading to high execution risk, high dependence on customer advances for project implementation and delay in financial closure of the debt. The rating is further constrained by the relatively lower experience of the promoters in executing such large-scale projects. Ritesh Properties & Industries (RPIL), incorporated in 1987, was engaged in the manufacturing of readymade garments at its manufacturing facility situated at Ludhiana. However, RPIL closed down the operations and entered into real estate development on the same land (42 acres of land on which factory was situated). Currently, RPIL is developing commercial (Hampton Plaza) & industrial plots at a total project cost of Rs118 crore funded through debt of Rs.77 crore (financial closure not yet achieved) and the remaining through promoter equity of Rs.41 crore.