Rationale

 The rating reaffirmation for Praviz Developers Private Limited (PDPL) factors in the strong occupancy levels for its commercial office project – Godrej BKC located in BKC, Mumbai, and the estimated adequate leverage metrics as of March 2025. PDPL’s occupancy improved to 100% as of March 2024 from 96% as of September 2023. The rental income is likely to increase by 6- 8% to Rs. 72-74 crore in FY2025, driven by improved occupancy and scheduled rental escalations. The company’s leverage is projected to remain adequate with estimated external debt/net operating income (NOI) at around 5.1 times as of March 2025 (PY: 6.1 times) due to a rise in NOI and reduction in external debt, supported by scheduled debt repayments. The rating considers the strong sponsor profile of PDPL, which is backed by the promoters of the Godrej Group (through a Godrej familyowned entity) and GOF-I (Master A) Pte Ltd., which has a reputed investor base. ICRA considers the attractive asset location and infrastructure of Godrej BKC, besides easy connectivity in the commercial hub of Mumbai, where PDPL owns three floors, supporting the asset’s marketability. The rating, however, is constrained by the small scale of operations with a single asset having 2-lakh square feet (sq. ft.) of leasable area. It also faces high tenant concentration risk, with two tenants occupying around 79% of the total leasable area as of March 2024, which exposes PDPL to vacancy risks. Moreover, the single asset nature of the business heightens the market risk in case of any vacancy/non-renewal of leases. Nonetheless, the favourable location of the asset and the company’s established track record of leasing provides comfort. PDPL’s debt coverage metrics are moderate with an estimated five-year average debt service coverage ratio (DSCR) at 1.1 times during FY2025-FY2029. Nevertheless, ICRA draws comfort from the adequate leverage levels, besides strong financial flexibility enjoyed by PDPL as a part of the Godrej Group. The rating is constrained by the vulnerability of its debt coverage indicators to changes in interest rates and reduction in occupancy levels. The Stable outlook on the rating reflects ICRA’s expectation that PDPL’s credit profile will be supported by the favourable location of the asset, strong occupancy levels resulting in stable rental income and adequate leverage metric.