Jagdamba Hospitality Group Limited (JHGL), a hospitality company developing and operating a five-star hotel in Naxal, Kathmandu under the internationally recognized Hilton brand, has had the ratings assigned to its Rs. 5.3 billion bank facilities withdrawn by Infomerics Credit Rating Nepal Limited (Infomerics Nepal).
The company, incorporated in July 2012, was converted into a public limited company in July 2023. JHGL operates as a special-purpose vehicle (SPV) established to own and operate its five-star hotel project in Kathmandu, which has a total capacity of 174 keys. The hotel partially commenced commercial operations on July 26, 2024, marking the company’s entry into Nepal’s upscale hospitality segment.
Hotel Operating Under Hilton Brand
JHGL has entered the hospitality sector through a partnership with internationally renowned hotel chain Hilton. The company has signed a comprehensive agreement with Hilton Worldwide Manage Limited for the operation of the property under the “Hilton Kathmandu” brand.
The hotel is located in Naxal, one of Kathmandu’s established commercial and hospitality areas, and is positioned to cater to business travellers, leisure visitors and other segments of the international and domestic hospitality market. JHGL is part of the Shanker Group, a diversified business group in Nepal. Shahil Agrawal serves as the chairman of the company and holds a majority stake of more than 90%.
Infomerics Withdraws Ratings with Immediate Effect
Infomerics Nepal has withdrawn the ratings assigned to JHGL with immediate effect. Prior to the withdrawal, the company’s issuer rating was IRN B+(Is) [INC], while its long-term and short-term bank facilities carried a combined rating of IRN B+/A4 [INC]. The ratings had been placed under the “Issuer Not Cooperating” category, with a watch status carrying negative implications. The withdrawn ratings covered Rs. 5.15 billion in long-term bank facilities and Rs. 150 million in short-term bank facilities, taking the total rated bank facilities to Rs. 5.30 billion.
Continued Non-Cooperation Cited as Key Reason
According to Infomerics Nepal, the rating action was taken in accordance with the guidelines of the Securities Board of Nepal (SEBON) following continued non-cooperation from JHGL in the rating surveillance process. The rating agency said it had made multiple follow-ups with the company seeking the information required for surveillance. However, the company continued to remain non-cooperative.
Before the withdrawal, the ratings had been placed under the Issuer Not Cooperating category along with a notice of withdrawal for a period of six months. During this period, Infomerics Nepal said there was no adequate cooperation from JHGL to facilitate the surveillance process. As a result, the rating agency was unable to obtain sufficient and updated information necessary to assess the company’s financial position, business performance and other factors relevant to the continuation of the ratings.
Key Rating Drivers and Financial Indicators Not Updated
Infomerics Nepal stated that, due to the unavailability of adequate information, it was unable to capture or update the company’s key rating drivers, rating sensitivities, and key financial indicators before withdrawing the ratings. The withdrawal therefore does not represent a fresh assessment of JHGL’s current credit quality based on updated financial information. Rather, it follows the rating agency’s inability to conduct the required surveillance because of the company’s continued non-cooperation. The analytical approach adopted by Infomerics Nepal for the rating assessment was based on a standalone approach.
Rs. 5.3 Billion Facilities No Longer Covered by the Ratings
With the withdrawal, the Rs. 5.30 billion bank facilities previously covered by Infomerics Nepal’s ratings are no longer subject to those ratings. The withdrawal includes the Rs. 5.15 billion long-term bank facilities and Rs. 150 million short-term bank facilities, along with the issuer rating previously assigned to JHGL.
JHGL’s hotel project remains part of Nepal’s growing branded hospitality segment, with the Hilton Kathmandu property having entered partial commercial operations in 2024. However, Infomerics Nepal’s latest action means that updated credit-rating information on the company and its rated banking facilities is currently not available through the agency due to the rating surveillance process being discontinued.
