ICRA Nepal has reaffirmed the long-term fund-based loan rating of R & R Hotels and Resorts Private Limited (R&R) at [ICRANP] LD and the short-term fund-based loan rating at [ICRANP] D. The total rated limits stand at NPR 830 million, with long-term limits of NPR 810 million and short-term limits of NPR 20 million of the company, i.e., R & R Hotels and Resorts Private Limited.
| Instrument | Last Rated Limits (NPR Mn) | Current Rated Limits (NPR Mn) | Rating Action |
|---|---|---|---|
| Fund-based, long-term | 810.0 | 810.0 | [ICRANP] LD; reaffirmed |
| Fund-based, short-term | 20.0 | 20.0 | [ICRANP] D; reaffirmed |
| Total | 830.0 | 830.0 | — |
Rationale Behind the Ratings
The reaffirmation follows delays in servicing debt obligations, with a reported delay of over 30 days for the quarter ending mid-January 2026. The ratings have been determined in accordance with ICRA Nepal’s Default Recognition Policy. Moving forward, a consistent record of timely debt servicing will be crucial for rating stability.
Key Rating Drivers
Credit Challenges
- Weak financial profile and high debt burden: R & R Hotels and Resorts Private Limited has experienced sustained losses, primarily due to pandemic-related disruptions in its initial years. The erosion of net worth has led to high gearing levels, with total debt to OPBDITA at 10.9x as of mid-July 2025. While repayment of deferred interest from pandemic periods is near completion, additional accrued interest of approximately NPR 23 million is expected to pressure coverage and liquidity metrics.
- Limited diversification and intense competition: Hotel Vivanta Kathmandu is a single-property hotel in Jhamsikhel, Lalitpur, making R & R Hotels and Resorts Private Limited highly exposed to concentration risk. Over the last decade, the Kathmandu Valley has seen multiple new high-end hotel openings, increasing competitive intensity, which could impact occupancy rates and average room revenues, putting pressure on R&R’s financial performance compared to its estimates.
Analytical Approach
ICRA Nepal applied its Corporate Credit Rating Methodology, taking into account financial performance, debt servicing history, and market positioning. Details of the methodology can be found here.
About R & R Hotels and Resorts Private Limited
Incorporated in April 2014, R&R Hotels and Resorts Pvt. Ltd. is a special purpose vehicle (SPV) formed to develop and operate a 5-star hotel under the Vivanta brand by Taj, part of the Indian Hotels Company Limited (Tata Group, India).
R&R is a joint venture between Chaudhary Group (CG Hospitality Pvt. Ltd.) and IG Group (IG Group Holdings Pvt. Ltd.), and the hotel officially commenced operations on 17 January 2019. The company has signed an 18-year (extendable) management and operations contract with the Indian Hotels Company Limited.
The reaffirmed ratings reflect the company’s operational progress but also highlight ongoing financial and market challenges, including debt repayment pressure and high competition in Kathmandu’s luxury hotel segment. Timely debt servicing and strategic operational management will be key for any future rating improvement.
