Rating Rationale
October 29, 2021 | Mumbai
Jakson Power Private Limited
Rating Reaffirmed
 
Rating Action
Total Bank Loan Facilities RatedRs.315 Crore
Long Term RatingCRISIL A-/Stable (Reaffirmed)
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 long-term bank facility of Jakson Power Private Limited (JPPL).

 

The ratings reflects the Jakson Power group’s diversified solar plant portfolio with established track record and healthy revenue visibility backed by long term PPAs (Power Purchase Agreement). These strengths are partially offset by susceptibility to changes in regulations and to technological risks associated with the modules and dependence on favourable climatic conditions for power generation and exposure to risks related to ongoing solar project

Analytical Approach

For arriving at its ratings, CRISIL Ratings has consolidated the assets and debt of JPPL with that of its wholly owned subsidiaries, Ascot Solar Private Limited (ASPL) (formerly known as Jakson Solar Pvt Ltd) and Centaurus Green Energy Private Limited (CGEPL) together referred as ‘Jakson Power Group’. This is because, all the entities in the Jakson Power group have business synergies and will be supported by each other, in case of cash flow mismatches.

 

Please refer Annexure - Details of Consolidation, which captures the list of entities considered and their analytical treatment of consolidation.

Key Rating Drivers & Detailed Description

Strengths:

  • Diversified solar plant portfolio with established track record: The group has a strong business risk profile marked with a diversified portfolio of operational solar asset of over 95 megawatt (MW) spread across Rajasthan, Uttar Pradesh and various sites. Jakson Power Group is operating 2 ground mounted solar power plants of 10 MW each in Jodhpur, Rajasthan (operational since 2013), a 10 MW solar ground mounted plant in Lalitpur, Uttar Pradesh (operational since 2015), 50 MW of solar ground mounted plant in Agra, Uttar Pradesh (operational since July 2021) and various multiple rooftop solar plants across Delhi and Haryana. Having multiple assets located in diversified regions provides revenue stability, as revenue decline from adverse climatical condition in one location will be offset by assets in other locations. The group is also adding a new 70 MW solar ground mounted power plant in Assam for Assam Power Distribution Company Limited.

 

  • Healthy revenue visibility backed by long term PPAs: The group has 25-year PPA’s with National Thermal Power Corporation (NTPC) for Jodhpur plants, Uttar Pradesh Power Corporation Limited (UPPCL) for Lalitpur plant and with various Government/CPWD and institutional clients for rooftop solar projects. These PPAs are signed for a tenure of 25 years. This minimizes offtake risk and ensures steady revenue visibility. Any change in terms relating to tariff and sales, or weakening of the credit metrics of NTPC, UPPCL, government/CPWD and institutional clients could impact the credit profile of group.

 

Weaknesses:

  • Exposure to risks inherent in renewable assets: Cash flow of solar power projects is sensitive to plant load factor (PLF), which depends on irradiation level and annual degradation of the solar panels. Degradation of solar panels may increase exponentially as the asset ages. Though geographic diversity mitigates the risk related to fluctuations in power generation, exposure to inherent operational risks related to renewable power assets persists. Further, generation of solar power depends on favourable climatic conditions and is exposed to inherent risks associated with solar radiation in the long term. Variation in solar intensity could reduce operating PLF, thus impairing debt-servicing ability.

 

  • Exposure to risks related to ongoing project: JPPL is setting up a 70 MW ground mounted solar power plant in Assam and is scheduled to commence its operations in March 2022. Group has executed 25 years of PPA with APDCL in March 2020 for the said project at a rate of Rs.3.98 per unit. The group has also received financial closure for the debt portion with PFC and project is almost 70-80% completed. While the project is expected to be completed within the stated timelines without any major cost overruns, timely completion and successful stabilisation of its operations will remain a rating sensitivity factor.

Liquidity: Strong

Liquidity has been adequate and should remain so going forward as well. Cash accrual -- projected over Rs 65 crore for fiscals 2022 and 2023 at the group level, respectively - should comfortably meet the maturing debt (interest+principal); the surplus cash will be used to aid financial flexibility and support the funding requirement for the proposed plant. Debt Service Reserve Account (DSRA) is equivalent to two quarters of the servicing in place for ground mounted operational project while group is expected to maintain Rs.10 crores of liquidity over and above the DSRA requirements. Consequently, liquidity should remain adequate to meet any exigency and shortfall.

Outlook: Stable

CRISIL Ratings believes the Jakson Power group will continue to benefit from its diversified portfolio and long-term PPAs.

Rating Sensitivity Factors

Upward factors

  • Maintaining a healthy DSCR of over 1.4 times and sustenance of operational performance.
  • Creation of DSRA adequate as per the counterparty risk, for the debt availed for 50MW solar plant in UP and 70 MW solar plant in Assam along with timely stabilization and operationalization of the ongoing project

 

Downward factors:

  • Significant drop in PLF or delays in collection of receivables
  • Delays in operationalization or any cost overruns in the proposed project.

About the Company

JPPL was incorporated 2011 together with its subsidiary and is engaged in developing and operating solar power projects. JPPL has set up 20 MW solar power plant at Jodhpur, Rajasthan, a 10 MW solar power plant at Lalitpur, Uttar Pradesh and 50 MW solar power plant in Agra, Uttar Pradesh. The Jodhpur plant has started its commercial operations on February 2013, Lalitpur plant has started its commercial operations on March 2015 and Agra plant started its commercial operation in July 2021. Counterparty under Jodhpur plant is NTPC while for Lalitpur plant and Agra plant, it is UPPCL. JPPL is setting up a new 70 MW ground mounted solar power plant in Assam for APDCL.

About the Group

Ascot Solar Pvt Ltd (ASPL) formerly known as Jakson Solar Pvt Ltd, incorporated in 2014, is engaged in developing and operating rooftop solar power projects. It currently has a portfolio of 5.265 MW at 21 multiple sites.

 

Centaurus Green Energy Pvt Ltd, incorporated in 2014, is engaged in developing and operating rooftop solar power projects. It currently has a portfolio of 11.22 MW.

Key financial indicators* - CRISIL Adjusted financials

As on / for the period ended March 31

 

2021#

2020

Operating income

Rs crore

42.46

40.70

Reported profit after tax

Rs crore

8.99

6.42

PAT margins

%

21.17

15.77

Adjusted Debt/Adjusted Net worth

Times

2.81

1.65

Interest coverage

Times

2.55

2.50

*Standalone figures

#Provisional

Any other information: Not applicable

Note on complexity levels of the rated instrument:
CRISIL Ratings' complexity levels are assigned to various types of financial instruments. The CRISIL Ratings' complexity levels are available on www.crisil.com/complexity-levels. Users are advised to refer to the CRISIL Ratings' complexity levels for instruments that they consider for investment. Users may also call the Customer Service Helpdesk with queries on specific instruments.

Annexure - Details of Instrument(s)

ISIN Name of Instrument Date of Allotment Coupon Rate (%) Maturity Date Issue Size (Rs Cr) Complexity level Rating Assigned with Outlook
NA Long Term Loan NA NA Mar-2033 313.2 NA CRISIL A-/Stable
NA Proposed Long Term Bank Loan Facility NA NA NA 1.8 NA CRISIL A-/Stable

Annexure - List of Entities Consolidated

Names of Entities Consolidated Extent of Consolidation Rationale for Consolidation
Jakson Power Private Limited Full Common management, business synergies, and same promoters
Ascot Solar Private Limited Full Common management, business synergies, and same promoters
Centaurus Green Energy Private Limited Full Common management, business synergies, and same promoters
Annexure - Rating History for last 3 Years
  Current 2021 (History) 2020  2019  2018  Start of 2018
Instrument Type Outstanding Amount Rating Date Rating Date Rating Date Rating Date Rating Rating
Fund Based Facilities LT 315.0 CRISIL A-/Stable   -- 31-07-20 CRISIL A-/Stable   --   -- --
      --   -- 16-07-20 CRISIL A-/Stable   --   -- --
All amounts are in Rs.Cr.
Annexure - Details of Bank Lenders & Facilities
Facility Amount (Rs.Crore) Name of Lender Rating
Long Term Loan 46 Tata Cleantech Capital Limited CRISIL A-/Stable
Long Term Loan 61 Indian Renewable Energy Development Agency Limited CRISIL A-/Stable
Long Term Loan 40 HDFC Bank Limited CRISIL A-/Stable
Long Term Loan 53 Tata Cleantech Capital Limited CRISIL A-/Stable
Long Term Loan 113.2 Indian Renewable Energy Development Agency Limited CRISIL A-/Stable
Proposed Long Term Bank Loan Facility 1.8 Not Applicable CRISIL A-/Stable

This Annexure has been updated on 29-Oct-2021 in line with the lender-wise facility details as on 31-Jul-2021 received from the rated entity.

Criteria Details
Links to related criteria
CRISILs Approach to Financial Ratios
Rating criteria for manufaturing and service sector companies
CRISILs Bank Loan Ratings - process, scale and default recognition
Criteria for rating solar power projects
CRISILs Criteria for Consolidation

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