Acuite has consolidated the business and financial risk profiles of KSAPL, its parent company KGEPL including all the subsidiaries/ SPVs of KGEPL. This is on account of common parent and management, similar line of operations and cashflow fungibility between each of the SPVs.

Established presence of group
The Kundan Group is an established organisation having more than five decades of experience in diversified sectors including mining, refining, metals & mineral processing and renewable energy - hydro & solar. The group forayed into the renewable business in 2018 with primary focus on inorganic growth through acquisitions of inactive renewable assets and worked on refurbishment and replenishment of the same. Additionally, the group operates a Non-Banking Financial Company (NBFC) that oversees the working capital and capital expenditure needs of its businesses. Presently, the group is well capitalized, primarily due to the cash flow generated from its gold refinery operations.

Strong growth in operating performance driven by increasing capacities
The constant focus of the group to renovate, rebuilt and replenish inactive renewable assets has led to an increase in the operating income from Rs 19.7 crore in FY23 to Rs 95.26 Crore in FY24. Further, with 81.7 MW of commissioned capacity, the group’s revenue grew to ~Rs.153 Cr. in FY25 (Est.). The operating margins have remained in the range of 65-70% and expected to be on similar lines over the medium term. Moreover, the company targets to build 170.01 MW of capacity by 2027, of which 88.3 MW is under construction. Therefore, with additional capacity coming into operations the operating performance of the group is expected to improve further.

Healthy financial risk profile supported by promoter infusions & low dependence on external debt
The financial risk profile of the group is marked healthy due to healthy net worth, low gearing, and strong debt protection metrics. The net worth of the company stood healthy at Rs. 278.62 crore as on March 31, 2024 as against Rs. 115.58 crore as on March 31, 2023. This increase in net worth is primarily due to the accretion of profits to the reserves and a fresh equity infusion of Rs.161 crore. Further, the net-worth improved to ~Rs 327 crore by the end of FY25 (Est.) on back of improved operating performance in FY25. Therefore, the gearing levels have remained below unity in FY24 & FY25. Further, the group has low reliance on external debt and majority borrowings are from the group’s non banking financial corporation (NBFC), in the form of unsecured loans which are repayable on demand. Therefore, the debt protection metrics have remained strong with debt service coverage ratio and interest coverage ratio standing at ~6.70 times (7.02) times and ~10.41 times (11.3) times respectively as on March 31, 2025 (Est.) (March 31, 2024). 
Acuite understands that the upcoming capex of ~Rs. 250 crore towards the under-construction capacity is expected to be majorly funded through internal accruals and debt from group NBFC, thereby keeping the financial risk profile healthy over the medium term.  

Stabilisation and implementation risks
The renewable arm of the group was started from December 2018 with majority of the growth being inorganic over the years. The group currently has a total commissioned capacity of 81.7 MW and an additional 88.3 MW of capacity is under construction/ under acquisition. Therefore, being a fairly new player in the industry the group is prone to stabilisation, implementation and execution risks. Also, the PLFs of commissioned projects have remained low to moderate on the account of operational issues. Further, while for the solar projects the group has entered into long tenor PPA, however, hydro power is sold on exchanges which keeps the rates susceptible to volatility.

Exposure to inherent risk in renewable energy generation
Hydropower plants inherently face risks related to both natural hazards and operational failures. While natural hazards like earthquakes, floods, and landslides can damage structures and disrupt operations, operational risks include equipment malfunctions, such as turbine or generator failures, as well as potential for accidents or disasters. Further, environmental impacts, like changes to river flow and aqua co-habitat, also pose inherent risks which impact the PLF for the plants. Additionally, the solar power plants are subject to technological risk, in which their ability to generate electricity is reliant on the surrounding radiation levels and the yearly deterioration of their solar panels.