ICRA Nepal has reaffirmed the credit ratings of Scion Hotels Private Limited (SHPL), while highlighting project execution, funding and stabilization risks associated with its proposed five-star hotel in Kupondole, Lalitpur. ICRA Nepal has reaffirmed the company’s long-term loan rating at [ICRANP] LB+ and short-term loan rating at [ICRANP] A4. The rating action was announced on October 8, 2026.
Loan Ratings Reaffirmed of Scion Hotels Private Limited (SHPL)
The long-term loan limits have been revised to NPR 2 billion from NPR 2.05 billion, while the short-term loan limits have increased to NPR 450 million from NPR 300 million. The short-term limits include embedded-funded and non-funded facilities within the long-term loan limits for Scion Hotels Private Limited (SHPL).
| Instrument | Previous Rated Amount | Current Rated Amount | Rating |
|---|---|---|---|
| Long-term Loan Limits | NPR 2,050 million | NPR 2,000 million | [ICRANP] LB+; Reaffirmed |
| Short-term Loan Limits* | NPR 300 million | NPR 450 million | [ICRANP] A4; Reaffirmed |
| Total | NPR 2,050 million | NPR 2,000 million |
*Includes embedded funded and non-funded short-term loan limits within the long-term loan limits.
Hotel Project Reaches 48% Financial Progress
According to ICRA Nepal, the proposed hotel project of Scion Hotels Private Limited (SHPL) had achieved approximately 48% financial progress as of September 21, 2026, including around 17% progress attributable to land purchase costs. The project is being developed as a 105-key five-star hotel under the Hyatt Place brand in Kupondole, Lalitpur. The project, Scion Hotels Private Limited (SHPL) is currently running around three months behind its original construction schedule.
Although the project Scion Hotels Private Limited (SHPL) is targeted for completion by mid-October 2027, Hyatt’s compliance and pre-operational requirements are expected to push the commencement of commercial operations to mid-April 2028. This represents a delay from the earlier targeted operation date of mid-July 2027.
Cost Escalation and Funding Risks Remain
ICRA Nepal noted that the project’s revised cost has declined by around 4% to approximately NPR 2.857 billion from the previous estimate. However, rising construction material costs, depreciation of the Nepalese rupee against the US dollar and Chinese yuan, and the extended construction period could create additional cost pressures.
The project Scion Hotels Private Limited (SHPL) also continues to face funding risks. While the entire debt requirement has now been tied up, only around 32% of the required equity has been injected by the promoters, compared with approximately 17% at the time of the previous rating exercise.
The high debt component is another concern, with debt expected to finance around 70% of the total project cost. ICRA Nepal said the relatively high leverage could result in stretched debt coverage indicators, particularly during the initial years of operations.
Promoter Support Critical During Initial Operations
Debt repayments are scheduled to begin from mid-April 2028, coinciding with the targeted commencement of commercial operations. ICRA Nepal expects the promoters to provide timely and adequate funding support to meet debt-servicing requirements, particularly if the project encounters cost overruns or requires additional funding during the initial stabilization period. The agency said the promoters’ ability to complete the project within the estimated cost and timeline will remain a key rating sensitivity.
Strategic Location and Hyatt Association Support Ratings
The ratings continue to benefit from the proposed hotel’s strategic location in Kupondole, Lalitpur, which is close to Kathmandu’s city centre, historical landmarks and the international airport. The surrounding area also has several corporate offices, diplomatic missions and international non-governmental organisations, which could support demand from business and institutional travellers.
The proposed association with Hyatt Place, an established international hotel brand, is another key credit strength. According to ICRA Nepal, the brand association could support the hotel’s initial customer acquisition and help it compete with other international chain-affiliated properties in the Kathmandu Valley. The promoters, who are associated with the RV Group, have considerable experience in residential property construction, although their direct experience in the hospitality sector remains limited.
Rising Competition Could Pressure Occupancy and Tariffs
ICRA Nepal has also flagged increasing competition in Kathmandu’s hospitality market. Several high-end five-star hotels have entered the market in recent years, while multiple additional properties are under development. The increasing number of properties could intensify competition and put pressure on the hotel’s occupancy rates, room tariffs and revenues compared with the company’s projections.
The hotel’s estimated cost per key is around NPR 27 million, which ICRA Nepal considers relatively high due to the central location and associated land acquisition costs. The total project cost also includes casino and banquet facilities. The proposed high debt burden and operating leverage could further pressure the company’s financial profile during the initial years until operations stabilize.
Tourism Recovery Provides Positive Outlook
Despite the challenges, ICRA Nepal said the gradual recovery of Nepal’s tourism industry and government initiatives to support the sector provide a favorable operating environment for the project. The government’s policy support, infrastructure development and international tourism promotion efforts are expected to strengthen the long-term prospects of Nepal’s hospitality sector. Nepal’s strategic location between India and China, along with increasing international tourist arrivals, also provides a sizeable potential customer base for hotels catering to both tourists and business travellers.
Project Completion and Hotel Stabilization Key to Rating
ICRA Nepal said the ratings could be upgraded if Scion Hotels Private Limited (SHPL) commences operations within the budgeted cost and timeline, while achieving targeted occupancy and tariff levels and maintaining adequate debt coverage indicators. Conversely, significant delays in project completion, substantial cost overruns, or lower-than-expected occupancy and room tariffs during the initial operating years could put pressure on the ratings.
About Scion Hotels
Scion Hotels Private Limited was incorporated in September 2021 to develop a five-star hotel in Kupondole, Lalitpur. The company is developing the 105-key Hyatt Place hotel on a plot measuring approximately 15,057 square feet. The company’s shares are equally held by Anisha Agrawal and Ganesh Agrawal. As of September 21, 2026, the project had achieved around 48% financial progress, with management targeting commercial operations from mid-April 2028.
