| Watsun Infrabuild Private Limited | ||||||||
| Rated amount enhanced | ||||||||
| Rating Action | ||||||||
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| 1 crore = 10 million | ||||||||
| Refer to annexure for Details of Instruments & Bank Facilities |
| Detailed Rationale |
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CRISIL has reaffirmed its 'CRISIL BBB-/Stable/CRISIL A1+(SO)' rating to the bank facilities of Watsun Infrabuild Private Limited (WIPL). It has also withdrawn the rating on the Rs 10.56 crore long term loan on receipt of request from the company and downsizing letter from lender. The withdrawal is in line with CRISIL's policy on withdrawal of bank loan ratings. |
| Analytical Approach |
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For arriving at the rating on the letter of credit (LC), backed by letter of comfort (LoC) of Rs 90 cr PTC India Financial Services Ltd (PFS; rated 'CRISIL A+/Stable/CRISIL A1+'), CRISIL has applied its criteria on rating instruments backed by guarantees. |
| Key Rating Drivers & Detailed Description |
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Strengths: * Confidence on P90 PLF estimates for entire 148 MW commissioned wind capacity: Entire 148 MW wind capacity was commissioned in two phases by November 2018. 54 MW of wind capacity was commissioned in November 2017. This capacity had actual PLF of 31.8% for last 1 year of operations ending February 2019, in comparison to P90 PLF of 31.0%. Remaining wind capacity of 94 MW was commissioned in November 2018. This capacity uses same Vestas turbine technology and evacuation infrastructure as that of earlier commissioned 54 MW wind capacity. Usage of same infrastructure and technology gives confidence on stabilization of 94 MW recently commissioned capacity. * Low offtake risk since entire 148 MW wind capacity and 55 MW (AC) under - construction solar capacity has PPAs with credit healthy counterparties: WIPL has signed PPAs, with average tenure of 10 years, with majority group captive and some third-party customers (~5%) for its entire capacity. More than 75% of total sales are to counterparties with high-to-adequate credit safety, as reflected in payment cycle of less than a month. Reliable P90 estimates, based on an independent study and derived from historical wind resource data of up to 9.2 years, increase confidence on the generation potential of the asset. * LC backed by unconditional and irrevocable LOC from PFS: The rating on WIPL's non-fund based facility is based on the strength of the unconditional and irrevocable LOC provided by PFS. The LOC covers the entire amount of the instrument, and their tenure is co-terminus. As per the LOC, PFS is the primary obligor, and undertakes to make all guaranteed payments without any deductions. Weaknesses: * Exposure to risks inherent in operating wind energy assets Wind power generation is highly vulnerable to seasonality and variance in wind intensity, which could reduce the operating PLF and affect the project's debt-servicing ability. * Implementation risk for 55 MW (AC) solar plant in development WIPL is developing a 55 MW (AC) solar power plant in same location of already implemented 148 MW wind power project in Periyapatti district, Tamil Nadu. Land and evacuation infrastructure for the solar plant have been secured. Company has signed PPA with same counterparties of its 148 MW wind power project for securing offtake agreements for its 55 MW (AC) solar capacity. Most of the approvals are in place and construction work is in progress. Project is expected to get operationalized in the month of October 2019. Fixed time fixed price EPC Contract has been awarded to L&T which mitigates the constriction risk to a great extent. Combined cash flow from both wind and solar asset will be used for the debt servicing. Implementation of solar project and its impact on cash flow will be closely monitored and any significant delay or cost over-run in commissioning or low generation for 55 MW solar plant will be a key rating sensitivity factor. |
| Liquidity |
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CRISIL believes that WIPL has adequate liquidity. It is expected to have net cash accruals of around Rs 70 crore each in fiscal 2020 and fiscal 2021. The company has long term repayment obligations, of around Rs 40 crore each in fiscal 2020 and 2021. It also had cash and equivalents of around Rs 44 crore as on September 30, 2018. |
| Outlook: Stable |
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CRISIL believes WIPL will benefit over the medium term from its limited offtake risk and healthy payment cycle. |
| About the Company |
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WIPL, incorporated in 2010 and a 73% subsidiary of Continuum Wind Energy (India) Pvt Ltd, generates wind power. The company has a commissioned capacity of 148 MW (in 2 Phases) as on date. Both the capacities are located in Periyapatti district, Tamil Nadu. WIPL has PPAs for its entire wind capacity with group captive and third-party customers. WIPL is implementing 55 MW (AC) solar power project in same location as the wind capacity. |
| Key Financial Indicators - (WIPL; CRISIL adjusted numbers) | ||||||||||||||||||||||||
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Any other information: Not applicable |
| Note on complexity levels of the rated instrument: CRISIL complexity levels are assigned to various types of financial instruments. The CRISIL complexity levels are available on www.crisil.com/complexity-levels. Users are advised to refer to the CRISIL complexity levels for instruments that they consider for investment. Users may also call the Customer Service Helpdesk with queries on specific instruments. |
| Annexure - Details of Instrument(s) | ||||||||||||||||||||||||||||||||||||||||||
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| Annexure - Rating History for last 3 Years | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| All amounts are in Rs.Cr. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annexure - Details of various bank facilities | ||||||||||||||||||||||||||||||||||||||||||||||||
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