CARE has assigned / reaffirmed CARE BBB; Stable / CARE A3+ (Triple B; Outlook: Stable / A Three Plus) ratings for total credit facilities of Rs. 133.87 Crores (Rupees One Hundred Thirty Three Crore and Eighty Seven lakh only) availed by the Company.
The revision in the ratings assigned to the bank facilities of KPI Global Infrastructure Limited (KPIL) takes into account commencement of commercial operations of its 25MW solar power plant without any cost & time overrun, satisfactory operations of its existing 15MW solar power plant with generation levels in-line with the P-90 capacity utilization factor (CUF) levels, low counterparty credit risk on account of long term Power Purchase Agreement (PPA) with reputed corporates having a strong financial risk profile and timely receipts of monthly payments. The rating also take the cognizance of ring fencing along with defined waterfall mechanism of cash flows from its 25MW solar power plant through setting up a Trust & Retention Account (TRA).
The ratings continue to derive strength from the experienced and resourceful promoter group, favorable location of the solar power plant, satisfactory power evacuation infrastructure, comfortable financial profile and favorable policy framework for solar power generation business on the back of various government-led reforms & incentives to encourage investments in this segment.
The ratings, however, continue to remain constrained on account of limited operational track record of its existing 15MW power plant, risk pertaining to terms and continuity of PPA agreements, susceptibility of its profitability to fluctuation in interest rates, variation in climatic conditions & technological risk associated with the solar power plants. The ratings weakness also takes into account lower than envisaged CUF levels during 10MFY20 and higher than envisaged working capital intensity of its captive power plant (CPP) segment.