Rating Rationale
March 12, 2025 | Mumbai
SEI Solar Power Private Limited
Rating placed on 'Watch Positive'
 
Rating Action
Total Bank Loan Facilities RatedRs.110.5 Crore
Long Term RatingCrisil A+/Watch Positive (Placed on 'Rating Watch with Positive Implications')
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 placed its rating on the long-term bank facilities of SEI Solar Power Private Limited (SSPPL) on 'Rating Watch with Positive Implications'.

 

Crisil Ratings has placed the rating on ‘Watch Positive’ following the acquisition of 100% controlling stake in SSPPL by Gentari Renewables India Pte Ltd (GRIPL), Singapore which is 100% owned by Gentari Sdn. Bhd (GSB), Malaysia. GSB is 100% owned by Petroliam Nasional Berhad (Petronas; foreign currency rating of 'A-/Stable' and local currency rating of A/Stable by S&P Global Ratings). This acquisition is a part of 1 GW oprerational portfolio acquired by GRIPL from Brookfield Renewables’ India business, incuding the 15 renewable assets rated by Crisil Ratings.

 

Prior to the recent acquisition by GRIPL, SSPPL was a part of Brookfield Asset Management Inc’s (BAM; rated S&P A-/Stable) group of 15 renewable assets in India through step-down subsidiaries including Brookfield Renewable Partners (BEP; rated S&P BBB+/Stable), which is a subsidiary of BAM, and TerraForm Global (rated S&P BB-/Stable) which is a subsidiary of BEP. The 15 assets include Azure Power (Gujarat) Private Limited (rated 'Crisil AA-/Watch Positive'), ESP Urja Pvt Limited (rated 'Crisil A+/Watch Positive'), Millenium Synergy (Gujrat) Private Limited (rated 'Crisil A+/Watch Positive'), SEI Solar Power Gujarat Pvt Ltd (rated 'Crisil A+/Watch Positive'), SSPPL (rated 'Crisil A+/Watch Positive'),  SEI Solar Energy Pvt Ltd (rated 'Crisil A+/Watch Positive'), SEI Suryalabh Pvt Ltd (rated 'Crisil A+/Watch Positive'), SEI Sitara Pvt Ltd (rated 'Crisil AA/Watch Positive'), SEI L'Volta Pvt Ltd (rated 'Crisil AA/Watch Positive'), Focal Renewable Energy two India Pvt Ltd (rated 'Crisil A+/Watch Positive'), Focal Photovoltaic India Pvt Ltd (rated 'Crisil A+/Watch Positive'), SEI Arjun Power Pvt Ltd (rated 'Crisil AA/Watch Positive'), EN Renewable Energy (rated 'Crisil AA/Watch Positive'), EN Wind Power Pvt. Ltd (rated 'Crisil AA/Watch Positive'), and Generacion Eolica India Pvt. Ltd (rated 'Crisil AA/Watch Positive'). These 15 assets have a combined total capacity of 302 mega-watt (MW) and were earlier referred to as ‘Terraform India Renewables Group’.

 

Crisil Ratings understands that the sale of 14 assets to GRIPL (out of the said 15 assets) has been completed while the sale of one of the asset i.e. Azure Power (Gujrat) Private Limited (5 MW at DC capacity) to GRIPL is underway and is expected to be completed by end of March 2025.

 

The assets had witnessed healthy operating performance with plant load factor (PLF) at P-90 or above, long-term power purchase agreement (PPAs) along with lower than expected leverage and timely receipt of bills over the past few years. Further, leverage was expected to reduce with scheduled repayments against which operating cash accruals were to remain healthy with PLFs expected to be more than the P-90 level over the medium term. While Crisil Ratings understands from the management discussion that the assets’ performance has been healthy in current fiscal as well, however, the rating action factors in the change in parentage of the assets while Crisil ratings await full clarity on recent operating performance of the assets along with leverage and parent support philosophy for the assets from the new parent, GRIPL. Timely receipt of the said information will be essential for resolution of the rating watch.

 

The ratings continue to reflect low offtake risk with the presence of long-term power purchase agreement (PPAs) and healthy operating performance. These strengths are partially offset by weak standalone financial risk profile and exposure to inherent risks of variation in solar irradiation.

Analytical Approach

For existing ratings, Crisil Ratings has applied its group notch-up framework to factor in the extent of support available to SSPPL from the parent. This is due to the presence of common promoters and management, common banker across all the entities, common line of business and cash flow fungibility between the entities. However, given the recent change in ownership and pending clarity on certain critical aspects including parent support philosophy, Crisil Ratings’ analytical approach is being re-evaluated.

Key Rating Drivers & Detailed Description

Strengths:

  • Expected strong operational and managerial support from the ultimate parent: The existing ratings for SSPPL factors in the benefit received by it being part of the group. However, given the recent change in ownership of assets, Crisil Ratings is in discussion with new management and is in process of evaluating Gentari Renewables’ support philosophy towards acquired assets. The same would be a key rating sensitivity factor.
     
  • Healthy business risk profile with high level of long term PPAs for its capacities: SSPPL is a solar power plant located in Rajasthan with a capacity of 24 MW and holds a 25-year Power purchase agreement (PPA) with National Thermal Power Corporation Limited. (NTPC). SSPPL being a vintage asset has a long track record of operations, it commenced operations in 2013 and shall continue operations for another 15 years as per the PPA.
     
  • Healthy operating performance: Operating performance of the assets remains strong with most of the assets operating above P90 levels likely to sustain going forward with no major reported technical issues in the plants. The actual PLF levels have been 14.7% during 2022, 16.58% during 2023 & 12.35% during 9MFY24, as against the degraded P90 level as of 2024 is at 12.52%, denotes SSEPL sustained operating performance along with healthy PLF levels from the last several years. Therefore, a healthy EBITDA remains over Rs. 19 crores during the last 3 years ending March 2023.
     

Weakness:

  • Exposure to inherent risks of variation in solar irradiation: Cash flows of renewable power projects are sensitive to plant load factor (PLF), which depends entirely on the wind and solar patterns that are inherently unpredictable. Any deviations in improvement in portfolio performance with respect to P90 projections will be a key monitorable.

Liquidity: Strong

The company has cash and equivalents of Rs. 8.06 crore (including DSRA of Rs. 4.33 crore) as of December 2023. The expected annual cash accruals of over Rs. 16 crore and existing cash and equivalents should be adequate for meeting the debt obligations of Rs. 12 crores and incremental working capital requirements of fiscal 2025. The financial flexibility of the entity is also strengthened by the fungibility of cash flows between the 15 entities which are understood to have a total free surplus cash and equivalents of around Rs. 100 crores.

Rating sensitivity factors

Upward factors:

  • Higher than expected improvement in the operating performance of SSPPL as well as other group assets with PLFs significantly above P-90 levels on a sustained basis supporting continued improvement in cash accruals
  • Continued reduction in debt from current levels for SSPPL as well as other group assets resulting in expected improvement in DSCR levels for the tenure of the loan

 

Downward factors:

  • Weakening of the operating performance with PLF levels sustaining below degraded P90 levels impacting the average DSCR.
  • Sustained delays in the payments from the counterparties resulting in weakening of the liquidity position.
  • Any change in the philosophy around cash flow fungibility within the group assets (pool of 15 assets)

About the Company

SEISPPL is a solar power plant located in Rajasthan having a capacity of 23.9 MW (DC) and has a 25-year PPA with NTPC.

About the Group

Established in September 2022, Gentari is a 100% subsidiary of PETRONAS and operates across three segments, including renewable energy, hydrogen and green mobility.

Key Financial Indicators

As on/for the period ended March 31

2023

2022

Revenue

Rs Crore

26.5

29

Profit after tax (PAT)

Rs Crore

-44.18

5

PAT Margins

%

-166

16.4

Adjusted Debt/Adjusted Net worth

Times

6.15

0.42

Interest Coverage

Times

5.62

6.93

Note: During the first nine months of the fiscal 2024, the company reported revenue of Rs. 18.33 crore with healthy EBITDA of Rs. 13.42 crores and Net Loss of Rs. 2.6 crores. However,full FY2024 financials are still awaited and the new management has highlighted that the same will be shared soon.

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 and are included (where applicable) in the 'Annexure - Details of Instrument' in this Rating Rationale.

Crisil Ratings will disclose complexity level for all securities - including those that are yet to be placed - based on available information. The complexity level for instruments may be updated, where required, in the rating rationale published subsequent to the issuance of the instrument when details on such features are available.

For more details on the Crisil Ratings` complexity levels please visit www.crisilratings.com. 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.Crore) Complexity Levels Rating Outstanding with Outlook
NA Proposed Term Loan NA NA NA 32.20 NA Crisil A+/Watch Positive
NA Term Loan NA NA 31-Mar-33 78.30 NA Crisil A+/Watch Positive
Annexure - Rating History for last 3 Years
  Current 2025 (History) 2024  2023  2022  Start of 2022
Instrument Type Outstanding Amount Rating Date Rating Date Rating Date Rating Date Rating Rating
Fund Based Facilities LT 110.5 Crisil A+/Watch Positive   -- 07-08-24 Crisil A+/Positive 11-05-23 Crisil A/Stable   -- --
All amounts are in Rs.Cr.
Annexure - Details of Bank Lenders & Facilities
Facility Amount (Rs.Crore) Name of Lender Rating
Proposed Term Loan 32.2 Not Applicable Crisil A+/Watch Positive
Term Loan 78.3 NIIF Infrastructure Finance Limited Crisil A+/Watch Positive
Criteria Details
Links to related criteria
Basics of Ratings (including default recognition, assessing information adequacy)
Criteria for Infrastructure sectors (including approach for financial ratios)
Criteria for factoring parent, group and government linkages

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