The rating agency has also affirmed the rating on the outstanding USD 325-million 12 per cent senior unsecured notes issued by Lodha Developers International and guaranteed by Lodha and certain subsidiaries at 'B', with a recovery rating of RR4.
"Lodha's ratings are supported by its strong market positioning, with the highest volume market share in the Mumbai metropolitan region," it said in a statement.
The ratings, Fitch said, are constrained by Lodha's high leverage, which it expects to remain elevated in FY19, before inching lower over FY20-FY21 as the firm completes the construction of its London projects and starts to access cash.
"Lodha, which reported robust cash collection and property presales over the last few years, have helped its volume market share in the Mumbai Metropolitan Region rise to 13 per cent as of April-December of FY18, up from 10 per cent in FY17 and 8 per cent in FY16, outpacing the overall market," it said.
The rating agency further said that it expects Lodha's undrawn credit lines, cash flow and business-risk profile as one of the country's leading homebuilders to help the company secure incremental refinancing when needed.
Lodha reported short-term debt of Rs 21,200 crore as of FY18, as Indian accounting standards require real estate companies to report debt due in the next three years as current maturities.
The developer has Rs 800 crore of debt falling due in FY19, with available and undrawn onshore credit lines of Rs 3,500 crore as at FYE17, and has already refinanced the Rs 200 crore of debt maturing in 3M19, according to Fitch.
"There is Rs 4,400 crore of debt falling due in FY20, including the Rs 3,250 crore unsecured notes. However, we expect Lodha's first London project in Lincoln square to be completed during the financial year, releasing cash flow of around GBP303 million (Rs 2,964 crore) available for servicing debt at London assets during this period," it said.
In addition, there is also GBP102 million (around Rs 999 crore) of unsold inventory at Lincoln Square, which the agency expects will be sold after FY20.
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