| Amplus Tumkur Solar Energy One 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 AA+/Stable’ rating on the long-term bank facilities of Amplus Tumkur Solar Energy One Private Limited (ATSEOPL).
The rating continues to reflect strong managerial and financial support likely to be received from Gentari Sdn Bhd, which is a 100% subsidiary of Petroliam Nasional Berhad, Malaysia (PETRONAS; foreign currency rating of 'A-/Stable' and local currency rating of A/Stable by S&P Global Ratings); healthy operational performance of the solar plant since commissioning; low offtake and counterparty credit risk, as the entire capacity is tied up with a strong counterparty -- NTPC Ltd (NTPC; ‘CRISIL AAA/Stable/CRISIL A1+’); and healthy financial risk profile, driven by comfortable debt service coverage ratio (DSCR) over the tenure of debt and robust liquidity.
These strengths are partially offset by technological risk associated with solar plants, dependence on favourable solar irradiation for power generation, and exposure to single-asset concentration risk. |
Analytical Approach CRISIL Ratings has considered the standalone business and financial risk profiles of ATSEOPL and used its criteria for rating solar power projects. Furthermore, CRISIL Ratings has applied its parent notch-up framework to factor in the support available to ATSEOPL from Gentari Sdn Bhd, which is a 100% subsidiary of PETRONAS. Treatment of optionally convertible debentures (OCDs) from the parent, Amplus Energy Solutions Pte Ltd (AESPL; wholly-owned step-down subsidiary of PETRONAS): CRISIL Ratings has not factored in payment of interest and principal repayment or redemptions in the DSCR calculations in line with the earlier approach, as these are subordinate to bank debt. These instruments carry an interest of 13% and any redemption or interest payment shall be post meeting restricted payment conditions and lender approval. |
Key Rating Drivers & Detailed Description Strengths: Strong financial, operational and managerial support from the parent ATSEOPL receives strong operational and managerial support from Gentari Sdn Bhd, which is a 100% subsidiary of PETRONAS. In case of exigencies, the company should continue to receive need-based financial support from its parent for timely servicing of debt. The propensity to support is high given the strategic focus of the group towards renewable energy, budgeted capital outlay plans and economic incentive, as reflected in healthy DSCR over the tenure of the loan.
Healthy operational track record of project with average plant load factor (PLF) above P90 level The 71.21-megawatt peak (MWp) power project of ATSEOPL has been operational for more than six years with average PLFs consistently above P-90 generation levels over this period. PLF was 18.81% and 17.79% in calendar years 2023 and 2022, respectively. The plant should continue to operate at P-90 level, given the healthy operational track record, resulting in stable revenue. However, operational performance and variance in PLF will remain key rating sensitivity factors.
Low offtake and counterparty risks with entire capacity tied up with strong counterparty The company entered a 25-year power purchase agreement (PPA) with NTPC at a flat tariff of Rs 4.79 per unit over the entire tenure of the agreement. Furthermore, NTPC has a track record of timely payments (generally received within 30 days from the invoice date), resulting in low counterparty risk.
Healthy DSCR With expectation of achieving P-90 PLF levels, long tenure of the debt (maturing in July 2033) and remunerative interest rates, the average DSCR for the project is expected to remain healthy over the tenure of debt. The rating is also supported by a DSCR covenant, which helps the structure to react better against the risk of lower-than-expected generation.
Weakness: Technological risks associated with solar power plants and dependence on favourable solar irradiation for power generation Solar power generation depends on irradiation levels around the plant's location. Furthermore, solar power plants are exposed to technological risks, such as impact of change in average temperatures on performance of modules or high-than-expected degradation over the life of modules, which may affect power generation. Given that cash flow of a solar power project is highly sensitive to variation in PLF, these factors could impair the debt servicing capability of solar projects. However, the anticipated technological risk associated with module performance is largely mitigated with presence of a 25-year warranty for module performance provided by manufacturers.
Concentration risk on account of single-asset operations The company’s generating asset consists of a single 71.21-MWp plant, located in Karnataka, exposing it to location concentration risk. However, this risk is managed by maintaining sufficient liquidity through a debt service reserve account (DSRA) equivalent to six months of debt servicing. |
Liquidity: Strong Cash accrual (available for debt servicing) is expected to be around Rs 42 crore each in calendar years 2024 and 2025, against debt obligation of around Rs 65 crore over the two years. DSRA requirement equivalent to more than two quarters of debt servicing is being maintained as deposits (Rs 20 crore as on April 30, 2024). Furthermore, as on April 30, 2024, the company had additional cash and equivalent (excluding DSRA) worth Rs 15.4 crore. CRISIL Ratings understands that, going forward, a part of this liquidity will be repatriated to the parent, post receiving lender approvals. The company does not have any working capital limit. Healthy cash accrual, financial flexibility from being a part of from Gentari Sdn Bhd, which is a 100% subsidiary of PETRONAS and DSRA of more than two quarters should ensure adequate liquidity to withstand any delay in payment from offtaker or any variation in PLF levels. |
Outlook: Stable ATSEOPL will continue to generate healthy cash accrual, backed by the long-term PPA and healthy PLFs. Furthermore, it should remain strategically important to PETRONAS and receive strong managerial, operational and financial support from Gentari Sdn Bhd, which is a 100% subsidiary of PETRONAS. |
Rating Sensitivity Factors Upward Factors
Downward Factors
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About the Company ATSEOPL operates a 71.21-MWp plant (commissioned in March 2018), which was acquired in September 2020 from ACME Solar. Post the acquisition, the name of the company was changed from ACME Kurukshetra Solar Power Pvt Ltd to Amplus Tumkur Solar Energy One Pvt Ltd. The plant, based on polycrystalline technology, is in Pavagada Solar Park, Karnataka, which is the second-largest solar park in India.
ATSEOPL is a 100% subsidiary of AESPL, which in turn is a 100% step-down subsidiary of Gentari Sdn Bhd (Gentari). Established in September 2022, Gentari is a 100% subsidiary of PETRONAS and operates across three segments, including renewable energy, hydrogen and green mobility. It has plans to grow its renewable asset portfolio to 30-40 gigawatt (GW) by 2030. |
Key Financial Indicators - ATSEOPL (CRISIL Ratings-adjusted numbers)
*Includes compulsory convertible debentures and optionally convertible debentures from the parent |
Any other information: Not Applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
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| Annexure - Rating History for last 3 Years | ||||||||||||||||||||||||||||||||||||||||||||||||||||
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| All amounts are in Rs.Cr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annexure - Details of Bank Lenders & Facilities | ||||||||||||
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Criteria Details
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