Varnabas Museum Hotel receives LB+ and A4 rating for its long term and short term funds from ICRA Nepal; Company an SPV for ethnically themed hotels

Fri, Feb 14, 2020 12:40 PM on Credit Rating, Latest,
Varnabas M...

ICRA Nepal has assigned the long-term rating of [ICRANP] LB+ (pronounced ICRA NP L B plus) to the NPR 536.74-million longterm loans of Varnabas Museum Hotel Private Limited (Varnabas). ICRA Nepal has also assigned the short-term rating of [ICRANP] A4 (pronounced ICRA NP A Four) to the NPR 10-million short-term loan limit of Varnabas. 

 Credit strengths

  • Low funding risk
  • Strategic location
  • Owner’s prior experience in tourism industry
  • Conducive environment for tourism-related ventures

Credit challenges

  • Project’s high execution risk
  • Sizeable debt burden likely to stretch liquidity and debt servicing ability
  • Increase in competition among star hotels
  • Limited geographical and segment diversification

About the company   

Varnabas Museum Hotel Private Limited (Varnabas) was incorporated in June 2018. It is a special purpose vehicle (SPV) that will own and operate a proposed four-star hotel, Varnabas Museum Hotel. The proposed hotel will be themed around various ethnicities (also known as ‘Varnas’ in local vernacular) of Nepal with different floors representing the heritage of different ethnicities from different geographies of the country. 

Varnabas is the first hotel ownership for Mr. Rajendra Bajgain, a tourism sector entrepreneur with over 20 years of experience who owns the entire equity stake in Varnabas. The proposed hotel is currently under-construction with expected commissioning in July 2021.  

Instrument Details                


Rated amount (NPR Million)

Rating assigned

Long-term; fund-based limits (Project Term Loan)



Short-term; fund-based limits (Overdraft)








Read the full report at: here