Credit Rating- New

11th September, 2026 To, To, BSE Limited Na(cid:415)onal Stock Exchange of India Limited Lis(cid:415)ng Dept. / Dept. of Corporate Services, Lis(cid:415)ng Dept., Exchange Plaza, 5th Floor, Phiroze Jeejeebhoy Towers, Plot No. C/1, G. Block, Bandra-Kurla Complex, Dalal Street, Mumbai - 400 001. Bandra (E), Mumbai - 400 051. Security Code: 539301 Symbol: ARVSMART Security ID : ARVSMART Dear Sir/Madam, Sub: Disclosure under Regula(cid:415)on 30 of the SEBI (Lis(cid:415)ng Obliga(cid:415)ons and Disclosure Requirements) Regula(cid:415)ons, 2015. Pursuant to Regula(cid:415)on 30 of the SEBI (Lis(cid:415)ng Obliga(cid:415)ons and Disclosure Requirements) Regula(cid:415)ons, 2015, we hereby inform you that Arvind SmartHomes Private Limited, a material subsidiary of the Company, has been assigned following ra(cid:415)ngs by India Ra(cid:415)ngs and Research (“IRA”): Sr. Instrument type Size of Issue Rating / Outlook Rating Action No. (INR in million) 1 Proposed Optional Convertible 1,000 IND A/Stable Assigned Debentures (“OCDs”) We are a(cid:425)aching herewith the Ra(cid:415)ng Ac(cid:415)on Commentary for your informa(cid:415)on. You are requested to take note of the same. Thanking you, Yours faithfully, For Arvind SmartSpaces Limited Prakash Makwana Company Secretary Enscl. As above India Ratings Assigns Arvind SmartHomes Debt Facilities ‘IND A/Stable’ Sep 11, 2026 | Arvind SmartHomes Private Limited | Diversified India Ratings and Research (Ind-Ra) has rated Arvind SmartHomes Private Limited’s (ASHPL) debt facilities as follows: Details of Instruments Size of Rating Regulator of Date of Coupon Maturity Rating Instrument Type Issue (INR Assigned with Instrument Issuance Rate Date Action million) Outlook/Watch Proposed optional MCA - - - 1,000 IND A/Stable Assigned convertible debentures Analytical Approach Ind-Ra has taken a top-down rating approach under its Parent Subsidiary Rating Linkage Criteria and factored in the strong operational and strategic linkages between ASHPL and its 100% parent Arvind SmartSpaces Limited (ASSL; ‘IND AA-’/Stable). Detailed Rationale of the Rating Action The rating factors in ASHPL’s strong operational and strategic linkages with ASSL as the former is a wholly owned subsidiary and due to the common management, tangible support, and the brand name Arvind. Additionally, both the entities are in the real estate business and operate in the same jurisdiction. On a consolidated basis, ASSL housed 15 ongoing projects as on 30 June 2026 with a total developable area of 58.6 million square feet (msf), of which three projects covering 2.3msf were housed under ASHPL. Also, ASHPL has no external debt except optionally convertible debentures (OCDs) with a tenor of eight years extendable to 10 years after prior approval. ASHPL’s collection efficiency was 27% in FY26, due to new projects launched at end-FY26 with 61% of the total cost incurred till March 2026, improving to 229% in 1QFY27. ASSL on a consolidated basis maintained robust collections during FY26, with somewhat steady collection efficiency of about 71% (FY25: 74%). Ind-Ra expects a similar range of 60%-65% through FY28, reflecting ongoing project advancements. ASHPL has yet to launch three projects spanning 1.60msf, which the agency expects would boost FY27 revenue recognition and help maintain a healthy revenue run-rate in FY27 and FY28. List of Key Rating Drivers Strengths Linkages with parent and group Healthy operational performance Strong credit metrics likely to sustain despite strong business development Weaknesses Moderate project concentration and diversification in terms of ticket size and geography Cyclical industry; exposed to regulations Detailed Description of Key Rating Drivers Linkages with Parent and Group: ASHPL, ASSL’s wholly owned subsidiary, is part of the Lalbhai Group (flagship companies – Arvind Limited and Arvind Fashions Limited) and benefits from common management, tangible support, and the common brand name. The parent has infused funds as and when needed in the company. As on 31 March 2026, the holding company extended loans to extent of INR3,233 million (FY25: INR989 million). Additionally, both the entities are in the real estate business and operate in the same jurisdictions. Healthy Operational Performance: ASHPL had a collection efficiency of 27% in FY26 (FY25: 292%), with about 61% of the total cost incurred till March 2026, improving to 229% in 1QFY27. The sharp variations in collection efficiency were due to projects being at a nascent stage, particularly the Skycrest launch (67% of the gross development value (GDV)), at end- FY26. ASHPL has INR2,630 million in receivables against pending construction cost of nearly INR2,130 million. It has three projects yet to be launched spanning 1.60msf. Ind-Ra expects the projects to boost the company’s FY27 revenue recognition, aiding them in maintaining a healthy revenue run-rate in FY27 and FY28. On a consolidated basis, ASSL has shown consistent operational improvement, with pre-sales growing about 22% yoy to INR15,500 million in FY26 (FY25: INR12,710 million) and collections rising 16.6% yoy to INR11,000 million (INR9,420 million). The growth was mainly supported by new project launches and additional phases, accounting for 60% of bookings, while maintaining acceptable sales velocities in ongoing projects, surpassing Ind-Ra's base case expectations. Collection efficiency remained healthy at about 71% in FY26 (FY25:74%). Given few projects would reach advanced stage in the next two years, Ind-Ra expects this ratio to remain in the range of 60%-65% over FY27 and FY28. ASSL’s net operational cash flow (OCF) Increased to INR4,170 million in FY26 (FY25: INR3,510 million), ensuring low credit dependency. Ind-Ra expects bookings and collections to show similar yoy growth through FY28, with pre-sales in the range of INR20,000 million- 22,000 million and collections in band of INR14,000 million- 16,000 million. Strong Credit Metrics Likely to Sustain, despite Strong Business Development: ASHPL has no external debt except outstanding INR1,950 million OCDs as on 30 June 2026. The entity is planning to issue additional INR1,000 million OCDs with a coupon rate of 3% p.a. The OCD term shall be eight years from the date of allotment of first tranche or such date as may be extended by a mutual agreement with debenture holders, subject to the maximum of 10 years unless redeemed or converted earlier at the option of debenture holder. The existing OCDs are secured against receivables from the upcoming projects in Sarjapur and Whitefield. The existing OCDs offer payment flexibility, coupon deferral, project-linked cash flow distributions, long tenor, and loss absorption capacity. However, redemption obligations, optional conversion, and investor put rights limit the risk. The proposed OCDs are likely to be secured against receivables of the Skycrest project. ASSL had reported low consolidated debt over FY23-FY25, primarily relying on reinvesting OCF for growth and business continuity. However, net debt (including HDFC Platform debentures) sharply increased to INR3,298 million in FY26 (FY25: INR377.09 million) to fund business development activities of about INR6,000 million. Ind-Ra expects INR10,000 million- 12,000 million of business development over FY27 and FY28. A continued strong collection performance over FY26 and an inclination towards joint development projects have enabled the company to aggressively pursue newer projects and land parcels, while maintaining low net leverage. These are in line with Ind-Ra's expectations of the company maintaining low leverage levels, with net debt in the range of INR8,500 million-9,000 million (including OCDs) in the medium term. ASSL’s net debt/net OCF was about 0.79x in FY26 (FY25: 0.11x), and the agency expects it to remain in the range of 1.5x-2x. FY26 presales-to-net debt ratio remained strong at 4.70x in FY26 (FY25: 33.71x), and Ind-Ra expects it to remain above 2. 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