Omaxe has been assigned a credit rating of CARE BBB-/Stable by CARE Ratings limited, an upgrade from stable outlook from CARE BB.
Omaxe has repaid net Rs 550 crore to lenders as principal payment and reduced its debt from Rs 1400 crores to Rs 850 crore as on March 31, 2022.
However, in Q1FY23 the debt level has increased due to issuance of NCDs of Rs. 440 crore (out of which Rs.340cr is raised till Jun 30, 2022) taken from Varde Partners.
“The upgrade in credit rating has come at a time where the company has a strong business pipeline and robust cash flow visibility for the short-midterm period. It reflects the management’s aspiration to progress towards reinstating company’s intrinsic value and strengthen the balance sheet,” said Atul Banshal, Finance Director – Omaxe Limited.
With this rating, Omaxe Limited will work towards optimising its debt profile even further through associations and partnerships with leading financial institutions across the spectrum.
The revision in the ratings of Omaxe Limited factors in the healthy sales and collection momentum during FY22 (refers to the period April, 2022 to June 30, 2022) which led to improvement in the liquidity position of the company.
The ratings, however, continues to remain exposed to execution and saleability risk for ongoing projects along with new launches, high cost of borrowing, continued Net Losses in FY21 and FY22, high debt repayment in FY22 and FY23 offset by adequate liquidity buffer and undrawn debt lines, inherent risk associated with Real Estate sector, cyclicality and seasonality associated with real estate industry and exposure to local demand-supply dynamic.
The financial risk profile of Omaxe group is characterized by modest debt position and comfortable gearing.
The company had collections of Rs 1912 crore in FY22 as against Rs 1295 crore in FY21. Further during the last three months ending Jun 30, 2022 company has achieved collections of Rs 450 crore with average monthly collection of Rs150 crore.
India’s realty sector is showing signs for healthy growth in 2022. The pandemic has helped residential real estate to bounce back, and the recovery was fabulous. The recovery has been attributed to people having to work from home. The rise in salaries has led to people spending more on bigger and better properties over the last year.
