India Ratings affirms Tata Housing's commercial paper at IND A1+

India Ratings affirms Tata Housing’s commercial paper at IND A1+

India Ratings and Research has affirmed Tata Housing Development Company’s Rs 1,200-crore commercial paper (CP) rating at IND A1+.

The proceeds from the commercial paper will be utilised to fund any working capital mismatches and meet general corporate purposes.

The ratings agency has counted continued strong strategic linkages with Tata Sons, strong brand and long operational track record, diversified portfolio, adequate liquidity indicators as key rating drivers.

In January 2018, Tata Sons infused equity of Rs 500 crore in Tata Housing, followed by a major equity infusion of about Rs 1,300 crore in two tranches of Rs 800 crore in December 2018 and Rs 500 crore in January 2019, which was utilised for repayment of debt.

Tata Housing Development Company’s geographically-diversified portfolio mitigates the inventory and price risks related to one particular area, India Ratings said.

The company’s completed and ongoing project inventory comprises mid-premium–accounting for around 85% of total area–and affordable projects under Tata Value Homes 15%. Of the company’s 28 projects, the top five projects accounted for 43% of the total saleable area as of September 2020.

The developer has presence across 12 micro-markets with Mumbai accounting 25% of the future saleable area over the fourth quarter of FY21-FY24 period, followed by Gurugram at 24%, Bengaluru 11%, Kolkata 11%, Pune 7% and others 22%. Ends