Rationale

 The reaffirmation of ratings for CEC ITD Cem TPL JV (CIT) takes into account the established track record of ITD Cementation India (ITD Cementation, rated [ICRA]A (Stable)/[ICRA]A1) and Tata Projects Limited, which have significant experience in executing metro projects. Apart from their established track record, JV partners’ corporate guarantee and sufficient unencumbered cash available for residual completion, provide additional comfort. While the project is in advanced stages of execution with ~96% of contract value has been billed as on December 31, 2023, the execution risk has largely subsided. ICRA notes that the JV partners, i.e., ITD Cementation and Tata Projects Limited, have provided corporate guarantee for the bank lines of the JV. The ratings are constrained by the geographical and client concentration risks with the unexecuted order book primarily consisting of Mumbai metro project. Nevertheless, the timely receipt of payments (average receivable period of 30 days) mitigates the counterparty credit risk to some extent. The JV is not expected to house more projects post completion of the present metro project. The Stable outlook on the rating reflects ICRA’s opinion that JV will continue to benefit from its strong parentage and experience of its promoters in executing metro projects