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India Ratings Assigns Acme Babadham Solar Power’s Term Loans Final ‘IND AA-(CE)’/Stable; Withdraws Existing Rating

India Ratings Assigns Acme Babadham Solar Power’s Term Loans Final ‘IND AA-(CE)’/Stable; Withdraws Existing Rating

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India Ratings and Research (Ind-Ra) has taken the following rating actions on Acme Babadham Solar Power Private Limited’s (ABSPPL) debt instruments:

Instrument TypeDate of IssuanceCoupon Rate (%)Maturity DateSize of Issue (million)Rating/OutlookRating Action
Senior project term loan*15 July 2036INR1,646.8WDWithdrawn
Senior secured term loan@15 April 2035INR1,927.7IND AA-(CE)/StableAssigned
Unsupported rating#IND AA-/StableAffirmed

 

*The rating of the existing term loans has been withdrawn as Ind-Ra has received a no dues certificate from the previous lender

@The agency has assigned the final rating on refinanced new term loan on the basis of the receipt of the executed new transaction documents such as common loan agreements, trust & retention account agreement, security trustee agreement etc..

#Ind-Ra has affirmed the unsupported rating for the same amount and maturity, in compliance with the Securities Exchange Board of India’s circular dated 13 June 2019, which requires credit rating agencies to disclose unsupported ratings without factoring in the explicit credit enhancement (CE) and supported rating after factoring in the explicit CE.

KEY RATING DRIVERS

For the detailed rationale, please click here.

RATING SENSITIVITIES

Negative: Future developments that may, individually or collectively, lead to a rating downgrade are:

–        Further increase in the receivables period by 60 days;

–        deterioration in the operational/financial performance, resulting in the minimum annual debt service coverage ratio being below 1.20x on a sustained basis; and

–        depletion of the project reserves, including the debt service reserve and overall liquidity.

–        deterioration in the sponsor-cum-operator’s credit profile

Positive: A significant improvement in the operating performance, with the plant load generation generation exceeding P75 estimates and the coverages exceeding Ind-Ra’s base case estimates, on a sustained basis, can result in a rating upgrade.

COMPANY PROFILE

ABSPPL operates a solar power project with capacity of 40MWAC in Village- Amravati, Taluk-Manvi, District-Raichur, Karnataka. A total 54.16MW of DC capacity has been installed against the said AC capacity in a DC:AC ratio of 1.35:1.

FINANCIAL SUMMARY-ABSPPL

Particulars (INR million)FY20FY19

 

Total income400.6448.1
EBITDA378.3428.7
Cash and cash equivalents125.0213.7
Source: ABSPPL

RATING HISTORY

Instrument TypeCurrent Rating/OutlookHistorical Rating/Outlook
Rating TypeRated Limits (million)Rating30 November 202026 May 2020
Senior project term loanLong-termINR1,646.8WDIND AA-/StableIND A+/Stable
Senior secured term loanLong-termINR1,927.7IND AA-(CE)/StableProvisional IND AA- (CE)/Stable
Unsupported ratingLong-termIND AA-/StableIND AA- /Stable

ANNEXURE

Financial Covenants

 

The covenants delineated in the project documents are as follows:

Nature of Financial CovenantBase Value FY21
Total debt to equity ratioAn overall long-term financing structure with debt to equity in the ratio of 75:25
Minimum DSCR1.22x
DSREquivalent to two quarters’ principal and interest obligations

COMPLEXITY LEVEL OF INSTRUMENTS

For details on the complexity level of the instruments, please visit https://www.indiaratings.co.in/complexity-indicators

SOLICITATION DISCLOSURES

Additional information is available at www.indiaratings.co.in. The ratings above were solicited by, or on behalf of, the issuer, and therefore, India Ratings has been compensated for the provision of the ratings.

Ratings are not a recommendation or suggestion, directly or indirectly, to you or any other person, to buy, sell, make or hold any investment, loan or security or to undertake any investment strategy with respect to any investment, loan or security or any issuer.

ABOUT INDIA RATINGS AND RESEARCH

About India Ratings and Research: India Ratings and Research (Ind-Ra) is India’s most respected credit rating agency committed to providing India’s credit markets accurate, timely and prospective credit opinions. Built on a foundation of independent thinking, rigorous analytics, and an open and balanced approach towards credit research, Ind-Ra has grown rapidly during the past decade, gaining significant market presence in India’s fixed income market.

Ind-Ra currently maintains coverage of corporate issuers, financial institutions (including banks and insurance companies), finance and leasing companies, managed funds, urban local bodies and project finance companies.

Headquartered in Mumbai, Ind-Ra has seven branch offices located in Ahmedabad, Bengaluru, Chennai, Delhi, Hyderabad, Kolkata and Pune. Ind-Ra is recognised by the Securities and Exchange Board of India, the Reserve Bank of India and National Housing Bank.

India Ratings is a 100% owned subsidiary of the Fitch Group.

For more information, visit www.indiaratings.co.in.

DISCLAIMER

ALL CREDIT RATINGS ASSIGNED BY INDIA RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTPS://WWW.INDIARATINGS.CO.IN/RATING-DEFINITIONS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY’S PUBLIC WEBSITE WWW.INDIARATINGS.CO.IN. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. INDIA RATINGS’ CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THIS SITE.

Source: indiaratings.co.in
Anand Gupta Editor - EQ Int'l Media Network