| SBSR Power Cleantech Eleven Private Limited | ||||
| Rating Reaffirmed | ||||
| Rating Action | ||||
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| Note: None of the Directors on CRISIL Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings. | ||||
| 1 crore = 10 million | ||||
| Refer to Annexure for Details of Instruments & Bank Facilities |
Detailed Rationale CRISIL Ratings has reaffirmed its ‘CRISIL A-/Stable’ rating on the bank loan facilities of SBSR Power Cleantech Eleven Private Limited (SBSR).
The rating reflects above average managerial and financial support (if required) derived from being a part of AGEL (thereby Adani Group), strong counterparty risk profile and adequate liquidity buffers. These strengths are partially offset by exposure to implementation risks and risks associated with renewable energy generation. |
Analytical Approach For arriving at the rating, CRISIL Ratings has applied its parent notch-up framework to factor in the extent of support available to SBSR from AGEL. This is because of the common line of business, focus and importance of SBSR assets to AGEL from growth and economic perspective.
Further, CRISIL has used group notch up framework to factor in available financial flexibilities, managerial and operational support AGEL receives from being part of the 'Adani group'. |
Key Rating Drivers & Detailed Description Strengths: High revenue visibility post commissioning SBSR has entered into a 25-year power purchase agreement (PPA) with Solar Energy Corporation of India Ltd (SECI; fully owned by the government of India) at fixed tariff of Rs 2.61 per unit, and thus remains shielded from offtake risks. The PPA has favorable credit terms with SECI and offers attractive rebates on prepayment.
Currently, ~ 70% of the total capacity has been commissioned (212 MW out of 300 MW), while the remaining capacity is expected to be commissioned by June 2023.
Managerial and financial support from AGEL
Adani Group is one of the leading infrastructure groups in India with presence across diverse verticals including ports, power, transmission and gas. AGEL is one of the targeted growth verticals for the group. This focus is expected to accrue to AGEL platform (from the group) in terms of implementation operational and financial (if required in an adverse scenario) support. Any change in the support philosophy will be a key sensitivity factor.
CRISIL Ratings has taken note of sharp fall in share prices of Adani group’s listed companies and recent part recovery.
Further CRISIL Ratings has also taken a note of recent raise of capital by group’s holding companies to tune of ~US$ 1.9 billion (~Rs 15,500 crores) from GQG Partners LLC through equity stake sale. In addition, over last one month, various Adani group companies have also received debt disbursements/ roll-overs amounting to over Rs. 5000 crore as per their earlier agreed loan sanctions.
CRISIL Ratings continues to monitor the developments with respect to the group. Any adverse regulatory/ government action, emerging issues around corporate governance, or a sustained decline in group’s resource raising capabilities from banks or capital markets will be key monitorable.
Weaknesses: Exposure to project execution risks Commissioning of ~70% capacity (212 MW) has been completed. However, remaining 88 MW of the project is yet to be commissioned, which exposes it to the risk of execution. Additionally, implementation risks also remain high for AGEL which has under-construction and implementation portfolio of ~13 GW (out of total portfolio of 20.43 GW) as of March 2023. On account of high under-construction proportion, AGEL currently has heightened leverage profile as marked by high Debt/ EBITDA ratio.
Susceptibility to risks associated with renewable energy generation The plant load factor (PLF) for solar power projects is vulnerable to variability in climatic conditions and risks related to equipment and evacuation. Given that the sensitivity of cash flow of a solar power project is the highest for PLF, these risks could severely impair the company’s debt servicing ability and free cash flow. |
Liquidity: Adequate Liquidity is expected to be strong over the medium term. Capex will likely be funded through debt and equity capital from AGEL (indirectly). Any shortfall is likely to be met by the parent. |
Outlook: Stable The ratings will continue to benefit from the strong support by the parent AGEL. |
Rating Sensitivity Factors Upward Factors
Downward Factors
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About the Company SBSR was formed to develop a solar project with cumulative capacity of 300 MW in Hapasar, Rajasthan, and is currently in the construction stage. The project has been partially commissioned (212 MW) and the remaining portion (88 MW) is expected to get commissioned, post signing of the PSA with SECI. The project is set up on a 25-year PPA signed with SECI at tariff of 2.61 per kWh. |
Key Financial Indicators
*Project is under construction |
Any other information: Not applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
*Performance bank guarantee ^Credit exposure limit |
| Annexure - Rating History for last 3 Years | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| All amounts are in Rs.Cr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annexure - Details of Bank Lenders & Facilities | |||
| Facility | Amount (Rs.Crore) | Name of Lender | Rating |
| Bank Guarantee* | 80 | Bank of Baroda | CRISIL A-/Stable |
| Letter of Credit | 627.8 | Bank of Baroda | CRISIL A-/Stable |
| Loan Equivalent Risk Limits^ | 50 | Bank of Baroda | CRISIL A-/Stable |
| Proposed Letter of Credit | 372.2 | Not Applicable | CRISIL A-/Stable |
| Proposed Long Term Bank Loan Facility | 0.08 | Not Applicable | CRISIL A-/Stable |
| Proposed Working Capital Facility | 26 | Not Applicable | CRISIL A-/Stable |
This Annexure has been updated on 30-Mar-2023 in line with the lender-wise facility details as on 28-Mar-2023 received from the rated entity.
*Performance bank guarantee
^Credit exposure limit
Criteria Details
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