Press Release

Greentech Power Private Limited

January 06, 2019
Rating
Amount 1
Facilities Rating Rating Action
(Rs. crore)
CARE A-; Stable (Single A
Long-term Bank Facilities 8.36 Reaffirmed
Minus, Outlook: Stable)
8.36
Total (Rupees Eight Crore and Thirty
Six Lakh Only)
Details of instruments/facilities in Annexure-1

Detailed Rationale & Key Rating Drivers

The rating assigned to the bank facilities of GPPL continues to derive strength from the experienced and resourceful promoter
groups and satisfactory operational performance of the project, assured revenue with low counter-party risk due to presence
of a long-term Power Purchase Agreement (PPA) with NTPC Vidyut Vyapar Nigam Limited (NVVN), low liquidity risk with
escrow mechanism with the lenders for debt repayments and adequate debt Service Retention Account (DSRA) covering one
quarter of debt servicing, improved capital structure and favorable outlook for the renewable energy sector.
The rating, however, continues to be constrained by exposure to technology risks and dependence of operations on the
favorable climatic conditions.

Key rating sensitivity

Positive Factors
Improvement in CUF and total operating income: Improvement in the CUF of the company to the level of around 20% and
total operating income of the company to a level of around Rs. 50 crore on sustained basis
Negative Factors
Decline in profit margins: Ability of the company to maintain its operating margin to remain in range of 76-80% and net
profit margin to remain in range of 24-26%
Deterioration in capital structure and debt coverage indicators: Ability of the company to maintain its capital structure
below unity and interest coverage ratio in range of 6-8x times and total debt /GCA in range of 1.00-1.50x times
Elongation in collection period: Ability of the company to continuously receive payment within a month and maintain
collection period below 30 days.

Detailed description of the key rating drivers

Key Rating Strengths
Experienced and resourceful promoter group: GPPL is a special purpose vehicle (SPV) managed by the Ajmera Group and
Parekh Group. Ajmera Group through its flagship entity, Ajmera Realty & Infra (I) Limited (one of the leading real estate
developers in Mumbai), has presence in the real estate development. Moreover, the group has other entities in cement,
steel, hotel, textiles and other industries. Parekh Group is into the manufacturing of power equipment. Both the groups have
established presence through its long standing track records in the industry. Further GPPL possesses moderate operational
track record of about 7 years in which it has given satisfactory power generation.

Long-term revenue visibility due to presence of PPA agreement with NTPC Vidyut Vyapar Nigam Limited for the period of
25 years: GPPL continues to be benefited due to assured revenue stream on account Power Purchase Agreement (PPA)
signed with NVVN for a period of 25 years for purchase of 9.198 million units p.a. at Rs.11.70 per kWh. Further payment for
the bills raised is normally received within period of 8-10 days. The same supports the cash flow availability and liquidity of
the company. PPA signed with a reputed customer having a strong credit profile leading to minimal counter-party risk as well.
Moreover, the company has shown consistent operating performance.

Satisfactory operational performance: GPPL had successfully commissioned the 6-MW solar power plant and achieved COD
on February 2012. Since commissioning, the project has been delivering satisfactory generation levels with consistent
Capacity Utilization Factor (CUF). During FY19, the power generation had marginally declined to 9.30 million units (with a CUF
of 18.08%) in FY19 (refers to the period April 01 to March 31) as compared to 9.74 million units (with a CUF of 18.93%) in
FY18. Further, the company has sold 4.86 MU at the rate of 11.70 per unit and thereby generated revenue of Rs.5.67 crore
till H1FY20.

1
Complete definition of the ratings assigned are available at www.careratings.com and other CARE publications
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 Press Release

Healthy profit margin: The operating margin of GPPL has slightly declined due to lower realization. Further despite decline in
operating profit margins, the net profit margin of the company has improved in FY19 on account of savings in financial
expenses owing to repayment of debt and lower depreciation cost.

Improved capital structure, moderate debt coverage indicators: GPPL’s comfortable capital structure further improved in
FY19 with improvement in overall gearing on account of repayment of term loan and accretion of profits to reserves..
Moreover, the debt coverage indicators have improved during the period with total debt to GCA and interest coverage of
1.66x and 6.14x respectively for FY19.

Strong liquidity position: Liquidity is marked by strong accruals against negligible repayment obligations and liquid
investments and free cash & bank balance to the tune of Rs.5.11 crore. With a gearing of 0.42 times as of March 31, 2019,
the issuer has sufficient gearing headroom, to raise additional debt for its capex.

Favorable outlook of the Solar Industry: Encouraging policy framework in renewable energy (RE) sector has resulted in rising
share of installed capacity of RE from around 17% of total energy capacity (approx. 57 GW out of 327 GW) as on March 31,
2017 to around 20% (approx. 69 GW out of 344 GW) as on March 31, 2018. India has an attractive geography for solar
energy. Solar radiation is about 5,000 trillion kWh/year and most parts enjoy 300 clear sunny days a year. Solar power
sector's cumulative installed capacity has increased from around 12.29 GW as on March 31, 2017 to around 21.65 GW as on
March 31, 2018. As per the National Solar Mission Scheme, cumulative solar installed capacity is projected to reach to 100
GW (including 40 GW rooftop projects) by 2022. Various state governments have come out with state policies for awarding
solar power projects. Also, other entities like NTPC, SECI etc. are coming out with tenders of large capacities in GW size,
including those in solar parks.

Key Rating Weaknesses

Exposure of the project towards climatic conditions and technological risk: The power generation level of a solar power
plant primarily depends upon factors like solar radiation levels, temperature and climatic conditions, losses in PV systems and
transmissions efficiency of the design parameters of the plant and inverters installed, module aging and degradation etc.
While losses in PV systems, design parameters, inverter efficiency and module degradation depend on the overall
manufacturing pattern and technical soundness of the modules, solar irradiance levels and overall climatic conditions are
beyond human control and thus have the potential to adversely affect the operational efficiency of a solar power plant.

Analytical Approach: Standalone

Applicable Criteria
Criteria on assigning Outlook to Credit Ratings
CARE’s Policy on Default Recognition
Financial ratios – Non-Financial Sector
Rating Methodology - Infrastructure Sector Ratings
Rating Methodology- Solar Power Projects

About the Company

Incorporated in 2010, Greentech Power Private Limited (GPPL) has a 6 Mega Watt (MW) grid interactive solar power project
based on multi-crystalline photo-voltaic (PV) technology in Bikaner district of Rajasthan.
GPPL was earlier promoted by Waaree Group; with Flagship Company being Waaree Energies Limited (WEL). The company is
presently managed by Ajmera Group and Parekh group with the current shareholders are Mr. Rajan Chhiber and Mr.
Mahendra Parekh (directors of Parekh Group of companies; with flagship company being National Lamination Industries),
Mr. Shashikant Ajmera and Mr. Nimesh Ajmera (belong to Ajmera Group; with flagship company being Ajmera Realty & Infra
(I) Limited). GPPL has commenced commercial operations from February 2012 and has signed a Power Purchase Agreement
(PPA) with NTPC Vidyut Vyapar Nigam Limited for a period of 25 years for purchase of 9.198 million units per year at Rs.11.70
per kWh. Furthermore, as per the 2nd amendment dated June 04, 2014, NVVN will purchase the excess power (above 9.198
million) at Rs.3 per unit or APPC (average power purchase cost) rate, whichever rate is lower. The company has signed the
operational and maintenance agreement with Mitash Energy Private Limited (MEPL). The contract price is to be reviewed
every year. Apart from MEPL the company also maintains a dedicated team for the self-operation and maintenance of the
plant. Further, Waaree Energies Limited (WEL being flagship company of Waaree Group) did EPC for the project. It installed
solar photovoltaic module (SPV module) and provided a 25 years performance warranty on the modules.

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 Press Release

Brief Financials (Rs. crore) FY18 (A) FY19 (A)

Total operating income 11.40 11.27
PBILDT 8.90 8.57
PAT 2.27 2.63
Overall gearing (times) 0.65 0.42
Interest coverage (times) 4.48 6.14
A: Audited

Status of non-cooperation with previous CRA: Not applicable

Any other information: Not applicable

Rating History for last three years: Please refer Annexure-2

Annexure-1: Details of Instruments/Facilities

Name of the Date of Coupon Maturity Size of the Rating assigned

Instrument Issuance Rate Date Issue along with Rating
(Rs. crore) Outlook
Fund-based - LT-Term - - September 2022 8.36 CARE A-; Stable
Loan

Annexure-2: Rating History of last three years

Sr. Name of the Current Ratings Rating history

No. Instrument/Bank Type Amount Rating Date(s) & Date(s) & Date(s) & Date(s) &
Facilities Outstanding Rating(s) Rating(s) Rating(s) Rating(s)
(Rs. crore) assigned in assigned in assigned in assigned in
2019-2020 2018-2019 2017-2018 2016-2017
1. Fund-based - LT-Term LT 8.36 CARE A-; - 1)CARE A-; 1)CARE A-; 1)CARE BBB+;
Loan Stable Stable Stable Stable
(06-Dec-18) (08-Dec-17) (23-Jan-17)

Note on complexity levels of the rated instrument: CARE has classified instruments rated by it on the basis of complexity. This
classification is available at www.careratings.com. Investors/market intermediaries/regulators or others are welcome to write
to care@careratings.com for any clarifications.

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 Press Release

Contact us
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Mradul Mishra
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Email ID - mradul.mishra@careratings.com

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Group Head Contact no. - 02267543554
Group Head Email ID - ruchi.shroff@careratings.com

Business Development Contact

Mr. Saikat Roy
Cell: + 91 98209 98779
E-mail: saikat.roy@careratings.com

Mr. Ankur Sachdeva

Cell: + 91 98196 98985
E-mail: ankur.sachdeva@careratings.com

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