India Ratings assigns Melmont Construction’s proposed Rs 165-cr NCDs ‘IND BBB’ rating

MUMBAI: India Ratings and Research has assigned realty developer Puravankara’s subsidiary Melmont Construction’s proposed Rs 165-crore non-convertible debentures (NCDs) a final rating of ‘IND BBB’. The Outlook is Positive.

The company is proposing to raise Rs 165 crore through NCDs, which will also be backed by the Puravankara Group. At the end of 2019-20, Melmont had Rs 130.2 crore of debt outstanding, which was held entirely by the parent, the ratings agency said.

Melmont, the wholly owned subsidiary of Puravankara, owns 18.12 acres of land in Kochi, which will be used to launch 2.87 million sq ft of residential and 0.36 million sq ft of retail space through its project.

The proposed NCDs neither have a fixed coupon nor a fixed principal repayment schedule. The entire current debt is held by the parent Puravankara and will be repaid using the proceeds of the proposed NCDs, India Ratings said.

The ratings agency believes the advances from the customers will be sufficient to meet the cash requirement for construction and in case of a shortfall, the support from NCD investors and the parent is likely to help Melmont.