| TruAlt Bioenergy Limited | ||||
| Rating outlook revised to 'Negative'; 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 revised its outlook on the long-term bank facility of Trualt Bioenergy Limited (TBL; part of Trualt group) to ‘Negative’ from ‘Stable’ while reaffirming the rating at ‘Crisil A-’.
The revision in outlook reflects a deterioration in operating performance, primarily driven by a one-time plant shutdown and lower ethanol allocation during the Cycle 1 (C1) Ethanol Supply Year 2025-26 (ESY26). The group undertook a plant shutdown from May to October 2025 to transition its capacity from a mono-feed to a dual-feed plant. Following this maintenance, the group currently possesses an operational capacity of 2000 KLPD of which 1300 KLPD is dual-feed capacity. However, this shutdown resulted in lower revenues during the first 8 months of fiscal 2026.
Subsequently, while production improved since November 2025, again the restricted ethanol allocation in C1 ESY26 have resulted in subdued operating performance. As a result, full year FY26 revenue will remain significantly lower than Crisil Rating’s earlier expectations. However, for FY27 the group has secured total orders of approximately 14 crore litres (remining supply from C1 ESY26) for first 7 months of fiscal 2027, 8 crore litres of private orders, and an additional 15 crore litres received via court order to address previous ESY25 shortfalls due to plant shutdown. With increased order visibility and no further planned shutdowns, revenue for FY27 is expected to recover significantly from FY26 levels. Nevertheless, the recovery of operating performance remains key monitorable.
The rating continues to reflect the experienced management, assured supply arrangements & moderate production flexibility, healthy demand for ethanol, & offtake agreements with oil marketing companies (OMCs) and moderate financial risk profile. These strengths are partially offset by susceptibility to fluctuations in raw material prices and exposure to regulatory risk in the distillery industry, and risk related to upcoming capital expenditure. |
Analytical Approach Crisil Ratings has previously combined the business and financial profiles of TBL and its wholly owned subsidiary, Leafiniti Bioenergy Pvt Ltd (LBPL). Crisil Ratings is currently revising its approach to combine the business and financial profile of TBL with its subsidiaries LBPL and newly acquired Trualt Gas Private Limited (TGPL), as these are subsidiaries of TBL and TBL’s management stance to support LBPL and TGPL.
Please refer Annexure - List of entities consolidated, which captures the list of entities considered and their analytical treatment of consolidation |
Key Rating Drivers - Strengths Experienced management, assured supply arrangement, and moderate production flexibility: Trualt’s in-house raw material sourcing for ethanol production, particularly from its group company, strategically fosters vertical integration. This ensures a seamless supply chain, granting the promoter group company direct control over raw material quality. Leveraging the sister/group concern’s resources enhances efficiency, reduces external dependency and boosts overall operational stability, providing a distinct strategic advantage. Trualt Group is one of India’s largest biofuels producers, having strategically positioned itself as a prominent and diversified player in the biofuel industry, particularly in the ethanol sector, with an aggregate production capacity of 2,000 kilolitre per day (KLPD) (increased from 1,400 KLPD) as on December 31, 2024. Of the total capacity of 2,000 KLPD, 1,300 KLPD was converted to dual feed plant as on August 2025, which can produce ethanol from cane (syrup, B-heavy molasses, C-heavy molasses), as well as grains (rice and maize). The dual feel plant partly mitigates the risk of any risk of non/lower availability of any particular raw material. Trualt, through its subsidiaries LBPL and TGPL, is a producer of compressed biogas (CBG) under the Sustainable Alternative Towards Affordable Transportation scheme introduced by the Government of India in 2018 and currently operates at 10.2 tonne per day (TPD) capacity and is expected to increase to around 190 TPD by FY29. The expansion plan in their CBG segment is partnered with GAIL (India) in case of LBPL, and with Sumitomo Corporation in case of TGPL. The group is expected to benefit from the experience of the strategic partners such as GAIL India and Sumitomo Corporation. Also, the promoters’ experience of over two decades in the industry, their strong understanding of market dynamics and healthy relations with customers and suppliers should continue to support the business.
Healthy demand for ethanol and offtake agreements with OMCs: The group’s product, fuel grade ethanol, will be used by OMCs in the Ethanol Blending Programme. The Government of India has mandated nationwide rollout of E20 petrol (20% ethanol blended petrol) from April 01, 2026, which is expected to support the demand for ethanol over the medium term. This coupled with offtake from OMCs such as Bharat Petroleum Corporation Ltd (‘Crisil AAA/Stable/Crisil A1+’), Indian Oil Corporation Ltd (‘Crisil AAA/Stable/Crisil A1+’) and Hindustan Petroleum Corporation Ltd (‘Crisil AAA/Stable/Crisil A1+’) will continue to support the business risk profile over the medium term. For FY27, Trualt has around 14 crore litres of remaining order from C1 ESY26, 8 crore litres of private orders, court order of 15 crore litres received via court order to address previous ESY25 shortfalls due to plant shutdown, which provides revenue visibility over medium term.
Moderate financial risk profile: Group’s financial profile is marked by above average capital structure and moderate debt protection metrics. TBL has raised around Rs.750 crores (net proceeds of Rs.657 crores) from the Initial Public Offering during October 2025. The proceeds from IPO has been predominantly used for working capital purpose, and partly for capital expenditure. Due to this, group networth is expected to improve for FY26. Group has around Rs.950-1000 crores of capex plans (funded by Rs.650-700 crores of term debt) for FY27 and FY28 combined to expanding the capacity in their CBG segment. Although debts levels are expected to increase due to debt addition for the capex, the capital structure is expected to remain above average with gearing expected to stay below 1.5 times over the medium term. Significant improvement in these parameters with regular term loan repayment and steady accretion to reserve will remain monitorable. Debt protection metrics are expected to remain moderate, due to high debt levels despite above average profitability, with interest cover expected to stay above 3 times in the upcoming years. |
Key Rating Drivers - Weaknesses Susceptibility to fluctuations in raw material prices and exposure to regulatory risk in the distillery industry: Group’s profitability is exposed to fluctuations in raw material prices. Since the prices of cane, rice and maize depend on demand-supply factors, these are volatile and can adversely affect the operating margin. Though the government regularly intervenes to adjust the ethanol price paid by OMCs as per the input cost, any delay in such price revision for ethanol by the government in the upcoming years, with an increase in raw material cost, can adversely affect the EBTIDA margins of the group, and sustainability of the margin at 15-16% amid fluctuating raw material prices will remain a key monitorable over the medium term. Government has banned the diversion of sugar for ethanol production during ESY24, which was lifted in ESY25. Since the ethanol industry is highly regulated, any change in the regulatory stance and continuation of government support to ethanol sector (particularly ethanol pricing) will remain monitorable. The modification to a dual feed plant partly mitigates the regulatory risk that is present in the sugar/sugar cane industry. However, profitability is exposed to fluctuations in raw material prices and timely revision of ethanol prices by the Indian government.
Risk related to upcoming capital expenditure: Group’s credit profile remains exposed to project execution and stabilization risks associated with its planned expansion in the CBG segment. Trualt is going for capital expenditure in its subsidiaries LBPL and TGPL, where around 100 TPD plant capacity, and 80 TPD plant capacity respectively are expected to installed by end of FY28, compared to an existing 10.2 TPD plant capacity in LBPL. The total cost of the capex is expected to be around Rs.950-1000 crores, expected to funded by term debt of Rs.650-700 crores. The capacity expansion plan is partnered with GAIL (India) in case of LBPL, and with Sumitomo Corporation in case of TGPL, and Trualt is expected to benefit from the experience of the strategic partners such as GAIL India and Sumitomo Corporation. Timely completion of these projects within budget and their successful stabilization will be key rating sensitivity factors. |
Liquidity Adequate Bank limit utilization was approximately 84% for the 12 months ended January 2026. Cash accrual is expected at Rs 270–360 crore per annum, which will remain sufficient against repayment obligations of Rs 180–260 crore per annum over the medium term. Furthermore, sale proceeds are routed through an escrow account that follows a waterfall mechanism to ensure that cash inflows are first utilized toward meeting debt obligations and then towards any other operational expenses; this provides comfort regarding debt servicing. While TBL was required to establish a Debt Service Reserve Account (DSRA) covering one quarter of debt payments by January 21, 2026, the company has requested a six-month extension from the bank for such creation. This is on account of weaker operating performance during the previous fiscal and the conscious decision of the management to preserve external liquidity to meet working capital/ capex exigencies. Approval of this extension is currently awaited from the lenders. Consequently, the timely creation of the DSRA in the coming months remains a key rating sensitivity factor. |
Outlook Negative The ‘Negative’ outlook reflects the lower-than-expected operating performance of Trualt and its revival remains a key monitorable over the medium term. |
Rating sensitivity factors Upward factors
Downward factors
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About the Company TBL, a part of the Karnataka-based MRN group, manufactures distillery products such as ethanol, extra neutral alcohol etc. The company had combined capacity of 1,400 KLPD, which further increased to 2,000 KLPD by December 2024. Mr Vijay Murugesh Nirani is the founder and managing director.
TBL was incorporated in 2021 as Closely held Public Limited and commenced its commercial operation from October 2022 after the Business Transfer Agreement with its group companies. However, and now reconstituted as a public limited company with the name ‘TBL.
TBL’s current capacity is carved out of the distillery units of Nirani Sugars Ltd with capacity of 700 KLPD, Sri Sai Priya Sugars Ltd with capacity of 500 KLPD and MRN Cane Power India Ltd with capacity of 200 KLPD under the business transfer agreement and all the assets and liabilities with respect to distillery units are transferred. |
About the Subsidiary LBPL, established in 2020, is a subsidiary of TBL. LBPL produces renewable CBG and allied from sugarcane press mud, other agricultural residue etc. generated by its group entities. Its plant at Bagalkot, Karnataka, has total production capacity of 10 TPD. LBPL is expected to undertake a phase wise capacity expansion plan, where around 100 TPD capacity of CBG plants are expected to be installed. LBPL is majority owned by TBL (51%) while remaining shareholding with GAIL (India) (49%).
TGPL was incorporated in 2024, and was acquired by TBL in October 2025. TGPL is currently setting up 4 Compressed Bio-Gas (CBG) plants, wherein each unit will produce CBG of 20 Tonnes Per Day (TPD), in the state of Karnataka and Maharashtra. The plant is expected to be commissioned by September 2026. TGPL is majority owned by TBL (TBL; 77.84% shareholding) while remaining shareholding with Nirani Holdings Private Limited (22.16%). |
Key Financial Indicators
*Adjusted for interest subvention |
Status of non cooperation with previous CRA: TBL has not cooperated with ACUITE Ratings & Research Limited (ACUITE) which has classified it as non-cooperative vide release dated June 09, 2025. The reason provided by ACUITE is non-furnishing of information for monitoring of ratings. |
Any other information: Not applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
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Annexure – List of entities consolidated
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| Annexure - Rating History for last 3 Years | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Annexure - Details of Bank Lenders & Facilities | ||||||||||||||||
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Annexure: List of instruments and names of regulators of the instruments As required by SEBI CRA Circular dated Feb 10, 2026, a list of activities or instruments falling under the purview of various FSRs, along with the names of respective FSRs, is being disclosed below:
* Includes securitisation transactions involving assignee payout, acquirer's payout. ~ The rated instrument may involve issuance of different instruments such as debt securities (listed or otherwise), bank loans, commercial paper (listed or otherwise), etc. The regulator of the instrument may accordingly be SEBI, RBI or MCA and can only be determined upon issuance. In PRs subsequent to issuance(s), Crisil Ratings Limited shall separately capture the rated quantum details along with names of respective regulators. ^ Includes bank facilities such as liquidity facility, second loss facility that are part of securitisation transactions. # There is no instrument being rated and hence, Regulator of the Instrument is not applicable. The rating scale and definitions are being followed as stipulated in SEBI Master Circular for CRAs. @ These ratings were assigned during regulatory regime prior to introduction of SEBI CRA Circular dated Feb 10, 2026 and the investor side regulators have accordingly been included.
Note: Kindly note that for activities or instruments falling under the purview of FSRs other than SEBI, the grievance/dispute redressal mechanisms and investor protection mechanisms provided by SEBI shall not be available. |
Criteria Details
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