Fitch rates Kumarapalayam Tollways loans BBB(ind)

Fitch Ratings said it assigned BBB(ind) ratings to Kumarapalayam Tollways Ltd.'s long-term project bank loans aggregating Rs.3,190 million, along with a BBB(ind) rating to the company's non-fund-based exposure aggregating Rs.114 million serving as performance security, executed in the form of a bank guarantee from IDBI Bank. A BBB-(ind) rating also has been assigned to its subordinated debt of Rs.200 million.

The outlook is stable.

Kumarapalayam is a special-purpose vehicle sponsored by Ivrcl Infrastructures & Projects Ltd., rated AA-(ind).

The ratings take into account the strong track record of its sponsor, Ivcrl, which is also the engineering, procurement and construction contractor and is responsible for operations and maintenance, Fitch said.

The ratings are constrained by the construction completion risk attached to the project, the single asset nature of the facility and the modest debt service coverage ratio, the agency said.

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