ICRA Upgrades Rating of Shree Saibaba Green Power Private Limited to BBB-

Strategic Insights -

Shree Saibaba Green Power Private Limited, a Special Purpose Vehicle promoted by Shree Saibaba Sugars Limited, has seen its rating upgraded by ICRA to BBB- (stable) from BB+ (stable) for its term loans aggregating to Rs. 25.11 crore. This upgrade is based on the company's demonstrated track record of healthy Plant Load Factor (PLF) levels over the last two years, improved financial profile, and lower interest costs. The rating also factors in the strong revenue and cash flow visibility for the company due to its long-term Power Purchase Agreement with NTPC Vidyut Vyapar Nigam Limited.

Key Takeaways:

  • The rating upgrade was triggered by the company's healthy PLF levels of 20.7% and 21.2% for FY 2014 and FY 2015, respectively.
  • The company's financial profile has improved with lower interest costs for FY 2015, supporting net profitability levels.
  • SSGPPL's debt coverage indicators are healthy, with Total Debt/OPBDIT at 3.29 times and interest coverage at 2.22 times for FY 2015.
  • The rating is constrained by the small scale of the company's operations and sensitivity of cash flows to PLF levels.
  • The company has provided loans and advances to its parent company, Shree Saibaba Sugars Ltd, amounting to Rs. 1.77 crore as on March 2015, which could be a key rating sensitivity.
  • SSGPPL has a strong revenue and cash flow visibility due to its long-term Power Purchase Agreement with NTPC Vidyut Vyapar Nigam Limited.

Statistics:

  • The upgraded rating of BBB- (stable) for the term loans aggregating to Rs. 25.11 crore.
  • The company's Plant Load Factor (PLF) was 20.7% for FY 2014 and 21.2% for FY 2015.
  • The company's Total Debt/OPBDIT was 3.29 times and interest coverage was 2.22 times for FY 2015.
  • The company provided loans and advances to its parent company, Shree Saibaba Sugars Ltd, amounting to Rs. 1.77 crore as on March 2015.
  • The company has a long-term Power Purchase Agreement with NTPC Vidyut Vyapar Nigam Limited for 25 years at a fixed tariff of Rs. 8.73 per unit.

Sources:

  • ICRA Limited, "ICRA upgrades the long-term rating of Shree Saibaba Green Power Private Limited to BBB- (stable)", June 2015.
  • ICRA Limited, "Rating Report for Shree Saibaba Green Power Private Limited", June 2015.