RATING RATIONALE

28 Sept 2020 ​ Goodwatts Solar Modasa Pvt Ltd

Brickwork Ratings reaffirms the rating for the Bank Loan Facilities of Rs.7.49 Crs. of Goodwatts Solar Modasa Pvt Ltd . (GSMPL or the ‘Company’)

Particulars: Amount (₹ Cr) Rating*

Facility** Previous Previous Present Tenure Present (Sep, 2019)

Fund based 10.06 7.49 BWR BBB- (CE)# BWR BBB- (CE)# Long Term Fund Based Stable (Stable) 4.00 - (Proposed) Reaffirmed

Total 14.06 7.49 Rupees Seven Crores and Forty Nine Lakhs Only

* Please​ refer to BWR website www.brickworkratings.com/ for definition of the ratings ​ ​ ** Details of Bank facilities are provided in Annexure-I #CE: The company was given a SO rating later changed to CE (credit enhancement) rating on account of the corporate ​ guarantee provided by Abellon Clean Energy Ltd.

Ratings: Standalone BB+/Stable (Assigned) and supported rating reaffirmed

RATING ACTION / OUTLOOK The rating takes into consideration the strong group presence, experienced management, revenue visibility, DSRA mechanism and continued corporate guarantee from Abellon Clean Energy Ltd. The ratings are, however, constrained by the inherent risks associated with the solar power business. The long term rating has been assigned a stable outlook on account of the fact that is looking to position itself as an alternative manufacturing destination for global companies after the coronavirus outbreak exposed how heavily they are reliant on China for raw materials and production. India has become one of the top renewable energy producers globally, with ambitious capacity expansion plans to achieve 175GW by 2022 and 500GW by 2030, as part of its climate commitments.

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KEY RATING DRIVERS

Credit Strengths: Part of Abellon Group: Goodwatts Solar Modasa Pvt Ltd is a special purpose vehicle created ​ by Abellon Clean Energy Limited (Abellon Group), for the purpose of owning and running the operative 3MW solar plant on a standalone basis.

Experienced Management: Mr. Aditya Handa, Managing Director of Abellon Group, is well ​ experienced in renewable energy business. Abellon group, promoted by Mr. Aditya Handa, is currently focussed on Waste-to-Energy projects, and implementing multiple projects in the State of . He is supported by a professional and qualified management team.

Revenue Visibility: The power of the 3 MW solar power plant is sold to GUVNL under a long ​ term PPA agreement valid upto 25 years.

DSRA: As per sanction terms, DSRA equivalent to two quarters installment and interest has ​ been created up-front from the date of disbursement. This will help in timely servicing of debt, in the event of any eventualities.

Credit Risks:

Inherent risk associated with solar power business: The various risk factors which can impact ​ the operations of the company are volatility in solar radiation levels, decline in power generation due to change in temperature and climatic conditions, inverter inefficiency, module degradation due to aging, etc.

ANALYTICAL APPROACH AND APPLICABLE RATING CRITERIA For arriving at its ratings, BWR has considered the standalone performance of Goodwatts Solar Modasa Pvt Ltd. BWR has applied its rating methodology as detailed in the Rating Criteria (hyperlinks provided at the end of this rationale).

RATING SENSITIVITIES Going forward, the Company’s ability to improve the scale of operations, and improve and maintain profitability, along with the debt servicing capability and liquidity, will be key rating sensitivities. Positive: The rating may be upgraded if the Company is able to achieve significant growth in ​ revenue and profitability backed by a favourable industry scenario and optimum utilisation of capacities.

Negative: The rating may be downgraded if lower-than-expected revenues affect profitability margins, coverage ratios, liquidity and gearing ratios adversely.

LIQUIDITY POSITION: Adequate The Company has cash and cash equivalents amounting to Rs 0.79 Cr in FY19 and Rs 0.06 Cr in www.brickworkratings.com Page 2 of 6 ​ ​ ​

FY20. The company has cash accruals amounting to Rs 0.67 Cr in FY19 which increased to Rs 4.81 Cr in FY20 which is sufficient to meet the long term debt obligations. The Company has received unconditional and irrevocable corporate guarantee from Abellon Clean Energy Ltd against the amount of loan taken.

Company Profile: Goodwatts solar Modasa Pvt Ltd (GSMPL) is a SPV by Abellon Clean Energy Limited (ACEL), incorporated for the purpose of owning and running a 3 MW solar power plant in Modasa, Gujarat on a stand alone basis.The site is located at a distance of 11 kms from National Highway No. 8 and 5 kms from the state Highway connecting Modasa with Shamlaji. It is approximately 110 kms from and 160 km from Udaipur in . The Company has signed a long term PPA for 25 years with Gujarat Urja Vikas Nigam Limited (GUVNL) at fixed tariff rate of Rs. 15 / Kwh for first 12 years and thereafter Rs. 5 / Kwh from 13th year to 25th year. Guarantor Profile: Gujarat based, ACEL was incorporated in 2008 by Mr. Aditya Handa. ACEL is a wholly-owned subsidiary of Claris Limited [erstwhile Altheon Enterprises Limited (AEL)]. The company is engaged in the supply of bio-fuel to its SPVs, undertakes solar installation projects for government and private organizations and EPC projects (includes technical support) majorly for SPVs. ACEL has 16 SPVs, engaged in renewable power and waste-to-energy business. The subsidiaries include 5 regional waste-to-energy plants of 43.82 MW and 2 solar plants which are operational and 5 Waste-to-Energy (WTE) Gujarat government PPA projects of 67.10 MW which are at various stages of completion.

KEY FINANCIAL INDICATORS : ISSUER FY20 FY19 Key Financial Indicators Unit Audited Audited Total Operating Income (in ₹ Cr) 6.28 1.88 PAT (in ₹ Cr) 2.51 0.17 Tangible Net Worth (in ₹ Cr) 17.87 11.72 Total debt/ TNW Times 0.48 1.28 Current ratio Times 0.22 0.19 ISCR Times 5.18 1.71

KEY FINANCIAL INDICATORS : GUARANTOR Key Financial Indicators Unit FY20 Prov FY19 Audited Total Operating Income (in ₹ Cr) 156.50 64.78 PAT (in ₹ Cr) 22.56 (15.75) Tangible Net Worth (in ₹ Cr) 494.37 283.45 Total debt/ TNW Times 0.13 0.33 ISCR Times 9.99 (0.66)

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KEY COVENANTS OF THE FACILITY RATED: NA

NON-COOPERATION WITH PREVIOUS RATING AGENCY IF ANY: NA

RATING HISTORY FOR THE PREVIOUS THREE YEARS [including withdrawal and suspended]

Facili Chronology of Rating History for previous three years (Rating Assigned & date, Current Rating ties rating withdrawn/ suspended if applicable)

Sep 2020 14 Sep, 2019 2018 26 Dec, 2017

Amt Amt Amt Amt Rating Tenure Tenure (Rs Rating Tenure (Rs Rating Tenure (Rs Rating ( Cr) ₹ Crs) Crs) Crs)

BWR BBB- BWR BBB- BWR Fund Long (CE) Long (CE) Long BBB- (SO) 7.49 14.06 NA NA NA 15.60 Based Term [Stable] Term (Stable) Term (Stable) Reaffirmed Reaffirmed Assigned

2020 16 May, 2019 2018 2017

BWR BBB- Fund Long NA NA NA 14.06 (SO) NA NA NA NA NA NA Based Term Reaffirmed

2020 27 Mar, 2019 2018 2017

Ratings Fund Long NA NA NA 14.06 moved to NA NA NA NA NA NA Based Term RNR

TOTAL 7.49 Rupees Seven Crores Forty Nine Lakhs Only

Standalone ratings: BWR BB+/Stable

COMPLEXITY LEVELS OF THE INSTRUMENTS

For more information, visit www.brickworkratings.com/download/ComplexityLevels.pdf ​ Hyperlink/Reference to applicable Criteria ● General Criteria

● Approach to financial ratios

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Analytical Contacts Investor and Media Relations

Vidyashankar Senior Director - Ratings B :+91 80 4040 9940 [email protected] Liena Thakur Assistant Vice President - Corporate Communications Saloni Singh +91 84339 94686 Ratings Analyst [email protected] D : +91 22 6745 6647 B :+91 22 2831 1426, +91 22 2831 1439 [email protected]

ANNEXURE I - Details of Bank Facilities rated by BWR

Sl. Name of the Bank Type of Facilities Long Term Short Term Total No. (₹ Cr) (₹ Cr) (₹ Cr)

1. State Bank Of India TL 7.49 - 7.49

TOTAL 7.49

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About Brickwork Ratings : Brickwork Ratings (BWR), a Securities and Exchange Board of India [SEBI] ​ registered Credit Rating Agency and accredited by Reserve Bank of India [RBI], offers credit ratings of Bank Loan, Non- convertible / convertible / partially convertible debentures and other capital market instruments and bonds, Commercial Paper, perpetual bonds, asset-backed and mortgage-backed securities, partial guarantees and other structured / credit enhanced debt instruments, Security Receipts, Securitisation Products, Municipal Bonds, etc. BWR has rated over 11,400 medium and large corporates and financial institutions’ instruments. BWR has also rated NGOs, Educational Institutions, Hospitals, Real Estate Developers, Urban Local Bodies and Municipal Corporations. BWR has Canara Bank, a leading public sector bank, as one of the promoters and strategic partners. BWR has its corporate office in Bengaluru and a country-wide presence with its offices in Ahmedabad, Chandigarh, Chennai, Hyderabad, Kolkata, Mumbai and New along with representatives in 150+ locations.

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