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The revenue of shopping malls is foreseen growing by 45-55 per cent this fiscal after an expected 45 per cent decline in fiscal 2021, Crisil Ratings said.

Accordingly, the expected growth will still be 15-20 per cent below the pre-pandemic levels because of continuing waivers for some under-performing retail segments and the possibility of fresh waivers across segments due to mobility curbs following the second wave of the Covid-19 pandemic.

"While fresh restrictions to curb the second wave of Covid-19 will affect retail sales, CRISIL Ratings expects the debt servicing ability of the malls it rates to be largely intact in the near term because of strong sponsors and healthy liquidity."

Notably, the rated malls average debt service coverage ratio is expected to decline by 10-15 per cent but remain healthy.

According to Anuj Sethi, Senior Director, Crisil Ratings: "We foresee retail sales in malls declining significantly in the first quarter of this fiscal versus pre-pandemic levels because of fresh restrictions, and recovering gradually by the end of the first half. Retail sales are expected to be 90 per cent of pre-pandemic levels for the second half of this fiscal, which may not warrant rental waivers."

"That would minimise the impact on rental income of mall owners. Accelerated vaccinations are crucial to retail sales revival, especially for non-essentials."