Rationale

 Big Space Ventures Logistics Private Limited (BSVLPL), a special purpose vehicle (SPV) sponsored by the IndoSpace network (IndoSpace; holds 74% stake in BSVLPL) and Corsa Ventures LLP holds 26% stake in BSVLPL, is developing an industrial and logistics park in Bhiwandi, Mumbai, Maharashtra, with a total leasable area of 1.42 million square feet (msf), spread across eight warehouse units. The assigned rating reflects the strong sponsor profile, along with the established track record of IndoSpace in the industrial warehousing and logistics space in India. The rating draws comfort from the project’s favourable location in the Bhiwandi micromarket and good connectivity to Mumbai, Thane, Navi Mumbai, and other adjacent industrial and warehousing hubs, along with the adequate leverage and debt coverage metrics estimated from the project. Further, the funding risk remains low as the entire debt requirement has been tied up and nearly 66% of the committed equity requirement (including internal accruals) has been infused as on March 31, 2024, for a budgeted debt-to-equity ratio of 1.5:1 for the project. The rating is, however, constrained by the project’s exposure to execution and market risks. The project is at a nascent stage, with 30% total project cost incurred as of March 2024. Nonetheless, the construction is expected to be completed within the scheduled date of commencement of commercial operations (DCCO) of July 01, 2029. ICRA takes note of the company’s exposure to market risk, as there are no leasing tie-ups as on date. Hence, its ability to achieve leasing on time and at adequate rental rates will be the key rating monitorable. Further, the company is exposed to refinancing risk for the construction finance (CF) loan, which has a bullet repayment of the facility in March 2030. However, ICRA derives comfort from the demonstrated ability and track record of IndoSpace to lease and execute projects on time. The company is also vulnerable to high geographical and asset concentration risks inherent in a single project portfolio. The Stable outlook reflects ICRA’s opinion that the company will complete the project without any material time and cost overruns as well as secure lease tie-ups at adequate rental rates within the scheduled DCCO.