ICRA has reaffirmed the long term rating of 'BB-' assigned earlier to Rs 700 million long term debt programme of Vipul. ICRA has also re-affirmed the long term rating of 'BB-' assigned earlier to Rs 300 million fund based limits, Rs 451.2 million non-fund based limits and Rs 48.8 million unallocated limits of Vipul. The long term rating carries a stable outlook. 

The rating re-affirmation takes into account the satisfactory pace of execution of Vipul's on-going projects, which is well supported by adequate collections from customers over the same period. In addition, the rating continues to factor in Vipul's established track record in NCR as well as its experienced management, and low approval risk for its on-going projects.

Notwithstanding the steady execution, the rating factors in the modest bookings achieved by the company in its on-going projects which coupled with the new launches not reaching the revenue recognition threshold has resulted in decline in its operating income.

Further, Vipul has significant debt repayments and committed payments towards land acquisition in medium term. ICRA has taken cognizance of the changing debt profile with rising reliance of company on short term loans and believes inability to achieve adequate bookings and maintain collections could expose Vipul to refinancing risk.

In addition, the rating factors in the weakening of Vipul's net profitability and coverage indicators in 9MFY14. Moreover, the rating continues to factor in the exposure to market risk for the unsold area (~1.3 mn sq.ft), risk of which is further accentuated as a large part of the cost is expected to be funded from customer advances.

Going forward, its ability to maintain healthy bookings as well as timely customer collections and project execution; and change in debt profile towards long term debt will be amongst the key rating sensitivity factors. 

Shares of the company gained Rs 0.16, or 2.89%, to settle at Rs 5.70. The total volume of shares traded was 2,762 at the BSE (Monday).