Covid-19 impact: ICRA downgrades TAJGVK Hotels & Resorts credit facilities

Topics ICRA | Coronavirus

: Rating agency ICRA has

downgraded TAJGVK Hotels & Resorts Limited long-term loans and short-term credit facilities.

The low rating was on account of expected decline in revenue and margins during this financial year, the hotel chain said.

In a filing with stock exchanges on Monday, the ICRA downgraded TAJGVK Hotels long-term loans aggregating Rs 165.63 crore and short-term, fund-based limits (Rs 30 crore).

The companys earnings would be weak during Q2 FY 2021 and this trend is expected to continue over the next several quarters with continued muted demand, the rating agency said.

With sharp fall in operating profits, the debt coverage indicators are likely to deteriorate in FY 2021, ICRA further said.

The company's reported meagre revenues of Rs 3.3 crore and operating losses in Q1 FY 2021 owing to the pan-India lockdown resulted in only one of its six properties apart from Taj Santacruz, which is under a JV with a GVK group company, being operational during the period.

The moratorium on debt servicing extended by the RBI for the period of March-August 2020 aided TAJGVK in tiding over the financial stress during the period.

With the moratorium coming to an end and accruals continuing to be weak, the company has applied for the loan restructuring for a period of two years with its lenders.

If approved by the lenders, this would provide a liquidity cushion to the company for debt servicing, it said.

While ICRA notes that the company has adequate funds in the form of undrawn working capital lines and fixed deposits for meeting its operational commitments in the near term, the company would need incremental debt/equity as the recovery gets prolonged, the rating agency added.


(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)


Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel