Rationale

 The assigned rating for Plusnineone Developments Private Limited (PDPL) factors in the strong occupancy at 100% as of May 2024 of its warehousing asset, aided by its favourable location in Unnao, Lucknow, with good connectivity (~3km from the Unnao toll on National Highway-27). The project has 0.45 million square feet (msf) of leasable area spread across two blocks. The full rentals for Block 1 (56% of total leasable area) have commenced from August 2023 and rentals for Block 2 will commence from June – July 2024. The debt coverage metrics are estimated to be adequate, supported by stable rental inflows and long debt tenure, with five-year average DSCR of 1.25 – 1.27 times during FY2025-FY2029. The rating draws comfort from the favourable sponsor profile of PDPL, which is a part of the Welspun One Logistics Park (WOLP) Fund I, a SEBI-registered Category II Alternate Investment Fund (AIF), anchored by promoters of the Welspun Group, designed to deliver large format, Grade-A warehouse parks across India. As of March 2024, WOLP had an area under management of around 8.5 msf (including one project where WOLP is acting as the development manager (DM)) spread across six locations. The rating is constrained by the high geographical and asset concentration risks inherent in a single project portfolio. The leverage for the company remains high with estimated Debt/Annualised NOI at around 7.6 - 7.8 times as of March 2025. The weighted average balance lease expiry period is 8.1 years compared to the weighted average debt maturity of around 14.75 years. Any significant vacancy for a prolonged period will adversely impact the company’s cash flows and debt coverage indicators. The vacancy risk, however, is mitigated to some extent by the large portfolio of the Welspun Group across geographies and its established relationship with reputed tenants. The debt coverage ratios remain vulnerable to changes in interest rates. The Stable outlook reflects ICRA’s opinion that PDPL will generate steady rental inflows from the asset and maintain adequate coverage metrics.