Detailed Rationale

Crisil Ratings has upgraded its rating on the short-term bank facilities of RattanIndia Power Ltd (RIPL; part of RattanIndia group) to ‘Crisil A3+’ from ‘Crisil A3’. Also, Crisil Ratings has withdrawn its rating on the non-convertible debentures (NCDs) of Rs 511.25 crore upon redemption and on receipt of repayment confirmation from the debenture trustee. The withdrawal is in line with the Crisil Ratings policy on withdrawal of ratings.

 

The upgrade in the rating factors the healthy improvement in the financial risk profile of RIPL on the back of prepayment of long-term secured debt on the company’s book and reduction in interest rate on the proposed working capital facilities. The company prepaid Rs 160 crore in the first half of fiscal 2026, thereby extinguishing its long-term secured debt. The company has availed sanction of Rs 300 crore of working capital lines, which is yet to be drawn down. Further, this sanction is at an interest rate of 11.5% per annum (p.a.) compared to 16.67% p.a. on the non-convertible debentures (NCDs), which were recently prepaid. The rating is also supported by healthy liquidity of Rs 355 crore (excluding letter of credit (LC)/bank guarantee (BG) margin) as on July 31, 2025. Operations of the plant are managed through a monitoring agency and all cashflows are escrowed in Trust and Retention Account (TRA), providing additional cushion. RIPL cannot withdraw from the TRA without the consent of its lenders.

 

RIPL’s business risk profile continues to benefit from low offtake risk backed by long-term power purchase agreements (PPAs) of 25 years for almost its entire net capacity, available fuel supply agreement (FSA), and timely receipt of regular receivables from its counterparty, the Maharashtra State Electricity Distribution Company Ltd (MSEDCL).

 

Healthy plant availability, improved plant load factor (PLF) and timely receipts of dues from counterparty including liquidation of regulatory receivables, has enabled RIPL to extinguish the secured fund-based debt in the first half of fiscal 2026. The company has achieved plant availability factor (PAF) of 82% in fiscal 2025 (86% in fiscal 2024 and 81% in fiscal 2023) leading to healthy recovery of fixed costs. Further, the company has achieved PLF of 78% in fiscal 2025 as compared to 82% in fiscal 2024 and 77% in fiscal 2023, driven by higher demand from MSEDCL.

 

Profitability, however, continues to be dependent on the timely and adequate supply of coal along with maintenance of availability.

 

These strengths are partially offset by the moderate financial risk profile and presence of counterparty risk due to long-standing, albeit improving levels of outstanding regulatory receivables from MSEDCL.

 

The company has 0.001% optionally convertible cumulative RPS (OCCRPS) from erstwhile lenders to the project, which are due for repayment/ conversion in December 2026, which continues to be monitorable.

 

On March 12, 2025 the Arbitral Tribunal dismissed the petition filed by the company against the interim arbitral award dated July 27, 2017 which had awarded Rs 115 Crore in favor of the Respondent, i.e. Bharat Heavy Electricals Ltd. The company has appealed against the same, thus, no immediate cash outflow is expected.

 

Further, on September 19, 2025, The petition filed by REC limited, under Section 7 of the Insolvency and Bankruptcy Code, 2016, against the company, has been dismissed by the Hon’ble National Company Law Tribunal, New Delhi Branch (Court – II). Accordingly, no cash outflow is expected in this regard. However, REC limited may go to/approach higher courts and thus, legal outcomes and cash outflow thereof, will remain monitorable.

Analytical Approach

Crisil Ratings has analysed the standalone business and financial risk profiles of RIPL to arrive at its ratings owing to the presence of a ring-fenced mechanism that insulates it from other assets in the group. RIPL entered into a settlement agreement with its erstwhile lenders in December 2019 along with signing an agreement to release RIPL from its obligations of servicing debt of its subsidiary Sinnar Thermal Power Ltd (presently a non-performing asset) out of RIPL’s cash flow.

 

Furthermore, aside from secured debt, RIPL also has Rs 1,450 crore of inter-corporate deposits (ICDs) from its promoters, and Rs 338 crore of unsecured loans from Aditya Birla ARC, which has been subordinated to the rated debt under the subordination agreement signed by both debt holders.

 

Moreover, there are also 0.001% RPS and 0.001% OCCRPS from original lenders to the project, which would be serviced in line with the Companies Act.

 

Crisil Ratings has considered only secured debt for leverage analysis, given, as per understanding from the management, the subordinated debt is long-drawn and prioritised below secured debt.

Key Rating Drivers - Strengths 

Low offtake and fuel supply risk

The company has a 25-year PPA (till 2040) with MSEDCL for almost its entire net capacity, which reduces offtake risk and provides revenue visibility. The tariff structure allows the company to recover its entire fixed cost, provided the plant achieves a normative PAF of 85%.

 

Additionally, the plant has adequate fuel linkage for its coal requirement driven by FSA with SECL for 6.1 metric tonne per annum (MTPA). Moreover, in case of further requirement or unavailability, the plant may procure coal from other alternate sources, contingent on requisite approvals, which allows it to show availability and recover fixed energy charges. Coal availability and its impact on PAF will remain monitorable.

 

Healthy operating performance

For the past three fiscals, the company has demonstrated a healthy track record of generation and offtake. The company has achieved PAF of 82% in fiscal 2025 (86% in fiscal 2024 and 81% in fiscal 2023) leading to healthy recovery of fixed costs. Further, the company has achieved PLF of 78% in fiscal 2025 as compared to 82% in fiscal 2024 and 77% in fiscal 2023, driven by higher demand from MSEDCL. This has led to optimum recovery of variable energy charges as well.  Since ~80% of the revenue is through energy charges, the ability of the plant to have steady offtake and hence, maintain moderate coal availability becomes critical.

 

The ability of RIPL to consistently recover its fixed capacity and variable energy charges, thus, generating healthy operating performance, will be a sensitivity factor. 

Key Rating Drivers - Weaknesses 

Moderate financial risk profile

RIPL is expected to have low external secured debt of Rs 300 crore as on March 31, 2026.

 

Post receiving favourable judgement from the appropriate judicial forum, the company has made collections of regulatory receivables amounting to Rs 1,300 crore since fiscal 2022. The company has partially utilised these proceeds to repay/prepay debt, which has improved its debt coverage ratios.

 

As on date, aside from secured debt, RIPL also has Rs 1,450 crore of inter-corporate deposits from its promoters, Rs 338 crore of unsecured loans from Aditya Birla ARC, and RPS/OCCRPS in favour of erstwhile lenders. Based on management articulation and agreements signed by current lenders with promoters and erstwhile creditors, Crisil Ratings understands that these facilities (except RPS/ OCCRPS) are subordinate to secured debt.

 

That said, any obligations arising out of subordinate debt will be a key monitorable.

 

Susceptibility to weak credit risk profile of counterparty

MSEDCL as an off taker exposes RIPL to high counterparty risk. Debtors were high at 231 days (estimated) as on March 31, 2025. However, out of the total receivables, ~85% are regulatory receivables and the rest are regular receivables. The regulatory receivables are on account of various changes in law billings, late payment surcharges and gross calorific value (GCV) related issues. However, the company has received favourable judgement from the relevant judicial forum basis which it has already recovered some of its regulatory receivables. This has led to regulatory receivables being reduced from 360 days as on March 31, 2021 to 199 days as on February 28, 2025.

Liquidity: Adequate

Liquidity is supported by cash balance of about Rs 480 crore (including restricted cash) as on July 31, 2025. Adequate liquidity is duly reinforced by the existence of TRA with the lender, under which all operational cashflows of RIPL is escrowed and utilised in a defined waterfall mechanism with priority for meeting operating expenses and timely debt servicing. The company also does not have major capital expenditure (capex) plans in the near term.

Rating sensitivity factors

Upward factors

• Sustainable improvement in the business risk profile with PAF above 85% on a sustained basis
• Favourable outcome in terms of disputed receivables from MSEDCL or ongoing litigations against the engineering, procurement and construction (EPC) contractor leading to improvement in the liquidity of the company

 

Downward factors

• Significant delay in receipt of payments from counterparties
• Weakening of the operating performance, for instance, PAF less than 80%, impacting cash flow
• Any adverse outcome in any of the pending litigations leading to material cash outflows thereby impacting the financial risk profile

About the Company

RIPL is a private power generation company with installed capacity of 1,350 megawatt [MW] (5 x 270 MW each) having thermal power plant at Amravati in Maharashtra. All the units were commissioned by March 2015. The plant has power offtake arrangement of 1200 MW with MSEDCL under long-term PPA for 25 years and matching FSA for 6.10 MTPA with SECL (a subsidiary of Coal India Ltd).

 

RIPL is promoted by the RattanIndia group.

Key financial indicators: Standalone (Crisil Ratings adjusted numbers)

As on / for the period ended March 31		2025	2024
		Audited	Audited
Operating income	Rs crore	3284.71	3,364
Profit after tax (PAT)	Rs crore	215.97	217*
PAT margin		6.58	6.5*
Adjusted debt / adjusted networth	Times	0.75	0.77
Interest coverage	Times	2.04	1.8

*excludes exceptional item of Rs 1,245 crore for impairment/ write off expense

Status of non cooperation with previous CRA:

RIPL has not cooperated with Brickwork Ratings, which has published its ratings as issuer not co-operating through a release dated August 23, 2019. The reason provided by Brickwork Ratings was non-furnishing of information by RIPL for monitoring the ratings.

Any other information: Not Applicable