Audit, rating, lending, then building

Mandate

Reduce debt after the NBFC funding squeeze, put every project's cash on a footing that the regulator and banks would trust, and make the company fundable at a better rating.

Outcomes

• Cut net debt from ₹1,920 Cr in March 2020 to ₹540 Cr in March 2026; average borrowing cost fell from 12.6 to 9.4 per cent.
• Credit rating raised from BBB+ to A- in 2023 and to A in 2025 by two agencies.
• Rebuilt project withdrawals on phase-wise land allocation and a ninety-day cash floor, drawing ₹310 Cr less than certificates allowed in FY2020-21.
• Took a promoter-group land joint development to shareholders at a 35 per cent revenue share instead of a 45 per cent area share.
• Refunded 214 delayed buyers at Kolshet, Thane, ₹223 Cr with interest; nine MahaRERA complaints, all settled.

Decisions in context

I joined Mridvika in November 2019 from Anvayi Finance, where I had lent to developers much like it. The company had grown quickly since its listing in March 2018, largely on NBFC money, and the funding squeeze that began in late 2018 had left it with ₹2,380 crore of gross debt at high rates. My mandate from Siddharth Kirtane was to reduce that debt and make the company fundable by banks. The lockdown of March 2020 changed the order of work. The project cash rules came first, the refinancing and the placement with institutions followed in 2021 and 2022, and the related-party and refund decisions came later. I lead 160 people with seven direct reports and attend the board and Audit Committee without being a director of the company. By March 2026 pre-sales were ₹4,120 crore, collections ₹3,480 crore, net debt ₹540 crore and our rating A.

Reason for the move

Current role. Not seeking an executive move; considering one independent directorship with the Mridvika board's consent.

Mandate

Build a developer-lending book in western and southern India with project-level monitoring of cash, approvals and construction.

Outcomes

• Grew the book from ₹2,100 Cr to ₹5,400 Cr across 61 projects and 38 developer groups.
• Introduced monthly escrow and independent-engineer site reviews for every project above ₹75 Cr.
• Held stage 3 assets in the book at 1.8 per cent in March 2019, through the first months of the NBFC funding squeeze.
• Restructured two stalled Pune projects by bringing in a new developer, recovering ₹290 Cr of principal.

Decisions in context

I joined Anvayi Finance in April 2014 to build its developer-finance business in western and southern India. Over five years my team grew the book from ₹2,100 crore to ₹5,400 crore across 61 projects and 38 developer groups. We lent for construction and, where our policy allowed, for land, against escrowed project receipts, and every project above ₹75 crore had an independent engineer's report each month. From 2015 I presented large proposals and stressed accounts to the credit committee of the board. After September 2018, when a large infrastructure lender's default froze funding for NBFCs, we stopped new lending and spent a year with developers who could not refinance. We restructured two stalled Pune projects by bringing in another developer and recovered ₹290 crore of principal. I left because I wanted to make the decisions I had spent years trying to monitor.

Reason for the move

After the 2018–19 funding squeeze halted new developer lending, wanted to run finance on the borrower's side, where the decisions that create the risks are made.

Mandate

Appraise and monitor road projects under toll and annuity concessions, port terminals and power plants for consortium lending.

Outcomes

• Appraised 23 infrastructure projects carrying ₹6,800 Cr of sanctioned debt.
• Led the bank's first review of traffic forecasts against actual toll collections across nine roads, showing an average shortfall of 27 per cent.
• Took part in the restructuring of four stressed road projects through the corporate debt restructuring mechanism.
• Introduced an annual lenders' engineer review of maintenance spending on operating toll roads.

Decisions in context

I moved to Ashmaka Bank in September 2008, the month the global credit shock arrived, to appraise infrastructure loans. Most of my work was on road projects built under toll and annuity concessions, with port terminals and two power plants alongside. I learnt how a thirty-year traffic forecast is assembled and how sensitive a project's debt service is to the first five years of it. In 2012 I led the bank's first review of forecasts against actual collections across nine toll roads in our book. Collections averaged 27 per cent below the forecasts we had lent against, and four of those projects later went through the corporate debt restructuring mechanism with me on the lenders' working group. Annuity projects, paid by the authority rather than by drivers, held up far better. I left wanting a business where cash could be watched monthly.

Reason for the move

Wanted to lend where collateral and cash could be watched month by month, and to a sector whose projects lasted three years rather than thirty.

Mandate

Rate the debt and bank loans of construction companies, real estate developers and road project companies.

Outcomes

• Led ratings for about 40 issuers a year, including the agency's first bank-loan ratings of real estate developers.
• Wrote the agency's internal note on assessing developer cash flows from bookings and cancellations.
• Downgraded three developers in 2008 when sales slowed, ahead of their missed payments.

Decisions in context

I joined Nirdhar Ratings and Research in January 2003, after four years in audit, as an analyst covering construction companies, developers and road projects. I became an associate director in 2006. A rating committee is a good school: every view has to be written so that four sceptical colleagues can test it, and every rating has to survive the next set of results. When banks began seeking external ratings for corporate loans around 2007, I led the agency's first bank-loan ratings of real estate developers and wrote an internal note on how to read their cash flows from bookings and cancellations. In 2008 sales slowed sharply and I downgraded three developers before they missed payments. I left because I wanted to make credit decisions, not only grade them, and a bank's infrastructure team offered that.

Reason for the move

Wanted to take credit decisions and live with them, not only grade other people's.

Mandate

Plan and run statutory and tax audit fieldwork for builders, contractors and housing societies.

Outcomes

• Led fieldwork on about 16 statutory and tax audits a year.
• Traced ₹6 Cr of booking advances at a builder client recorded against the wrong building, and had the accounts corrected.
• Trained nine articled assistants over four years.

Decisions in context

After qualifying in 1998 I stayed with the Pune practice where I had trained, working as an audit senior. I ran fieldwork on about sixteen statutory and tax audits a year, five of them for builders and several for cooperative housing societies whose members had bought from those builders. The formative engagement came in 1999, when I traced booking advances received for one building in Kothrud to a land payment for another site. The firm had the client correct the accounts, but the buyers of the first building still waited three extra years for possession. I learnt to follow a receipt from the customer to the site it was meant for, a habit that later became the basis of how I read project accounts. I left at the end of 2002 to join a credit rating agency and see the same risks across many companies.

Reason for the move

Wanted to study credit risk across many companies rather than audit them one at a time.