Note:- For activities or ratings of instruments falling under the purview of Financial Sector Regulators other than SEBI, the grievance / dispute redressal mechanisms and investor protection mechanisms provided by SEBI shall not be available.
Rating Rationale
Acuite has upgraded its long-term rating to 'ACUITE A' (read as ACUITE A) from 'ACUITE A-' (read as ACUITE A minus) and reaffirmed in its short-term rating of 'ACUITE A1' (read as ACUITE A one) for the bank facilities of Rs.600.00 Cr. of Odisha Power Generation Corporation Limited (OPGCL). The outlook remains ‘Stable’.
Rationale for Rating The rating upgrade factors in the healthy business risk profile, reflected in a plant availability factor (PAF) of ~85% and plant load factor (PLF) of above 80% during FY2026. While some moderation has been witnessed compared to FY2025 due to backdown of thermal generation by GRIDCO during peak solar hours amid availability of lower-cost solar power, the scale of operations has improved, supported by higher revenues and strong profitability margins, driven by better coal realisations from e-auctions and revised tariff rates. The group continues to benefit from long-term agreements, ensuring strong revenue visibility and low offtake risk, along with the strategic proximity of the plant to coal mines, aiding operational efficiency. The ratings also factor in the group’s strategic importance and strong linkages with the Government of Odisha (GoO). In addition, the financial risk profile of the group has remained healthy marked by improvement in net worth due to accretion of reserves and equity infusion made by the GoO, led to a comfortable capital structure, despite ongoing debt-funded capex plans along with adequate liquidity position. Further, OPGCL’s refinancing initiatives aimed at reducing borrowing costs are expected to provide additional financial flexibility. This is further supported by prepayment of long-term debt of Rs.100 crore each in FY26 and FY25 made by OCPL. However, the rating strengths remain partially offset by the intensive working capital cycle and exposure to regulatory risks.
About the Company
Odisha Power Generation Corporation Limited
Bhubaneswar, Odisha based, Odisha Power Generation Corporation Limited (OPGCL) was incorporated by the Government of Odisha in 1984. The company generates and makes bulk supply of power by establishing operating & maintaining power generating stations. Mrs. Manasa Ranjan Rout, Mrs. Hrudaya Kamal Jena, Mr. Sariputta Mishra, Mr. Yudhisthir Nayak, Mrs. Suchitra Pal, Mr. Vishal Kumar Dev, Mr. Narendra Nath Misra, Mr. Krushna Chandra Samal are directors of the company. The company had set up two units aggregating of 210 MW thermal power station at Banaharpalli (IB Thermal Power Station) in the district of Jharsuguda in December 1994 (unit 1) and June 1996 (unit 2). Since its inception the company has been making profits from unit 1 & 2. Power Plant is located at IB-Thermal Power Station, Banaharpali, Jharsuguda, Odisha with Installed capacity of 660MW each for units 3& 4 (July 2019 and August 2019).
About the Group
Odisha Coal and Power Limited
Bhubaneswar, Odisha based, Odisha Coal and Power Limited (OCPL) was incorporated in 2015. It is a joint venture of Odisha Power Generation Corporation Limited (OPGCL) having 51% shareholding and Government of Odisha having 49% shareholding. The company is engaged in mining and extracting coals for supplying to Thermal Power Plants of Odisha Power Generation Corporation Limited through the coal mines of Manoharpur and Dip-side of Manoharpur block. Further, OCPL was allotted the Tangardihi-North coal block on August 21, 2025. The block is currently at a pre-development stage and has estimated reserves of 1,100 million tonnes, which is expected to provide operational synergies.
Mr. Vishal Kumar Dev is the chairman while Mr. Kedar Ranjan Pandu, Mr. Susanta Kumar Singh, Mr. Nihar Ranjan Panda, Mr. Anjana Ranjan Dash, Dr. Debi Dutta Tripathy and Mr. Gagan Bihari Swain are directors of the company.
Unsupported Rating
Not Applicable
Analytical Approach
Extent of Consolidation
•Full Consolidation
Rationale for Consolidation or Parent / Group / Govt. Support
Acuite has consolidated the financial and business risk profile of Odisha Power Generation Corporation Limited (OPGCL) and Odisha Coal and Power Limited (OCPL). The consolidation is on account of Odisha Coal and Power Limited being a 51% subsidiary of Odisha Power Generation Corporation and Odisha Coal and Power Limited being incorporated to cater to the coal needs of Odisha Power Generation Corporation Limited for Unit 1, 2, 3 & 4 and for its upcoming Unit 5 & 6 through the coal mines of Manoharpur and Dip-side of Manoharpur block. OPGCL has given corporate guarantee to OCPL in terms of financial assistance.
Key Rating Drivers
Strengths
Strategically important entity to Government of Odisha (GoO) The group is strategically important for the power sector infrastructure in the state of Odisha. OPGCL is also one of the key entities for undertaking power generation activity in the state of Odisha other than Odisha Hydro Power Corporation Limited (OHPCL). The status of being a government-owned entity provides adequate financial flexibility. OPGCL's credit profile is also supported by its access to funds at low cost and its ability to mobilize financial resources from several financial institutions and multilateral development institutions. The rating also factors regular equity infusion by GoO in OPGCL. Odisha has been one of the fastest growing states in India with a low debt to gross state domestic product. The GoO has significantly increased its focus on increasing industrial development in the state. It is also focusing on asset creation towards infrastructure and social sectors. Acuite believes that OPGCL shall continue to benefit from the financial, operational, and managerial assistance received from GoO from time.
Low Offtake Risk owing to PPAs and FSA Of the total capacity of 1,740 MW, 100% is tied up through long-term PPAs with GRIDCO Limited. The PPAs are structured on a two-part tariff mechanism, ensuring recovery of both fixed and variable costs for the entire power generated. This helps to mitigate any volatility associated with their customer. The company has consistently demonstrated strong operational performance, supported by regular maintenance of its power plants, enabling it to maintain a plant availability factor (PAF) above the normative levels of 68.49% and 85% (as specified in the PPAs) for Units 1 & 2 and Units 3 & 4, respectively, thereby ensuring full recovery of fixed costs. OPGCL has a fuel supply agreements (FSA) with OCPL (Unit 1&2 -75% and Unit 3&4- 100%) and Mahanadi Coalfields Limited (Unit1&2- 25%) lowers fuel availability risk for power generation under the PPAs and fulfils 100% of their requirement. Furthermore, purchase of coal is done through the bank guarantee mechanism. Acuite believes that the presence of long-term offtake arrangements coupled with assured fuel linkages provides strong revenue visibility and operational stability over the medium term.
Healthy scale of operations The revenues of the group stood at Rs.4371.39 Cr. in FY25 as against Rs.4105.39 Cr. in FY24. Further, the group achieved ~Rs.4564 Cr. in FY26 (Prov.). This increase was based on sales of coal i.e. 25% of the production to e-auction with better coal realizations and revised tariff rates. The EBITDA Margins stood at 48.92% in FY25 as against 47.21% in FY24 due to marginal decline in raw material costs, employee costs and administrative expenses. Further, EBITDA margin of OCPL and OPGCL stood at 32.30% till Q3FY26 and 35.44% till FY26 respectively. The PAT margin stood at 18.61% in FY25 as against 16.30% in FY24. Further, PAT margin of OCPL and OPGCL stood at 18.82% till Q3FY26 and 12.33% till FY26 respectively. Acuite believes that the scale of operations will improve over the medium term.
Healthy Financial Risk Profile The financial risk profile of the group remained healthy marked by improved networth, comfortable gearing and moderate debt protection metrics. The networth of the group stood at Rs.6233.35 Cr. in FY25 as against Rs.5316.96 Cr. in FY24 due to accretion of reserves and infusion of equity by the Government of Odisha in OPGCL. There was an equity infusion of Rs.203.00 Cr. in FY25 for the R&M Project Phase I related to Units 1 & 2. The gearing improved to 1.06 times in FY25 from 1.36 times in FY24. The debt protection metrices of the group stood moderate marked by Interest coverage ratio (ICR) of 3.50 times and debt service coverage ratio (DSCR) of 1.51 times for FY2025. Acuite believes that the financial risk profile will remain healthy over the medium term, supported by steady accruals, government support and moderate capital structure.
Weaknesses
Intensive working capital cycle
The working capital cycle has improved but remains intensive as reflected from Gross Current Asset (GCA) days of 154 days in FY25 as against 172 days in FY24. The inventory days stood at 60 days in FY25 as against 50 days in FY25. OPGCL stores coal and oil for 45 days and 2 months respectively. The debtor days stood at 77 days in FY25 as against 104 days in FY24. The credit terms for OPGCL from OCPL is a credit period of 1 month and another 15 days available. The credit terms with GRIDCO is of 30 days and if the payment received beyond 30 days, then a late payment surcharge is charged. The creditor days stood at 79 days in FY25 as against 71 days in FY24. The credit terms for OPGCL are on advance basis and varies based on the contract. Acuite believes working capital cycle will remain intensive over the medium term on the back of its nature of business.
Exposure to Regulatory Risks
GRIDCO is the sole counterparty for OPGC's power output and is directly exposed to the health of the Odisha discoms. Thus, OPGC's collection efficiency largely depends on state of the power sector in Odisha. However, these risks are mitigated by presence of a robust two-tier payment security mechanism comprising a letter of credit and an escrow mechanism, which has led to timely realization from discoms.
Assessment of Adequacy of Credit Enhancement under various scenarios including stress scenarios (applicable for ratings factoring specified support considerations with or without the “CE” suffix)
Acuite takes into consideration the benefit derived by OCPL from the 100% ownership of Government of Odisha, either directly or indirectly.
Stress Case Scenario
While the rating has been derived on the consolidated credit risk profile and cash flows of the group, Acuite believes given the 100% holding of Govt of Odisha (directly / indirectly); in case of any stress case scenario, the required support would come from the state of Odisha.
Rating Sensitivities
Potential triggers (individual or collective) for an upward rating action:
Continued improvement in the operational performance with better PLF generations
EBITDA margins increase above 60% on a sustained basis
No further elongation of receivables and timely recovery of delayed payment surcharge
Potential triggers (individual or collective) for a downward rating action:
Elongation in working capital cycle with GCAs above 190 days on a sustained basis
Significant increase in debt fund capex thereby affecting the financial risk profile
ACUITE A- | Stable
(Upgraded from ACUITE BBB+ | Stable)
Proposed Short Term Bank Facility
Short Term
66.00
ACUITE A1
(Upgraded from ACUITE A2+)
Bank Guarantee (BLR)
Short Term
34.00
ACUITE A1
(Upgraded from ACUITE A2+)
Lender’s Name
ISIN
Facilities
Listing Status
Regulated By
Date Of Issuance
Coupon Rate
Maturity Date
Quantum (Rs. Cr.)
Complexity Level
Rating
AXIS BANK LIMITED
Not avl. / Not appl.
Bank Guarantee (BLR)
Unlisted
RBI
Not avl. / Not appl.
Not avl. / Not appl.
Not avl. / Not appl.
70.53
Simple
ACUITE A1 | Reaffirmed
Union Bank of India
Not avl. / Not appl.
Cash Credit
Unlisted
RBI
Not avl. / Not appl.
Not avl. / Not appl.
Not avl. / Not appl.
500.00
Simple
ACUITE A | Stable | Upgraded ( from ACUITE A- )
Not Applicable
Not avl. / Not appl.
Proposed Short Term Bank Facility
Unlisted
RBI
Not avl. / Not appl.
Not avl. / Not appl.
Not avl. / Not appl.
29.47
Simple
ACUITE A1 | Reaffirmed
Note:- For activities or ratings of instruments falling under the purview of Financial Sector Regulators other than SEBI, the grievance / dispute redressal mechanisms and investor protection mechanisms provided by SEBI shall not be available.
*Annexure 2 - List of Entities (applicable for Consolidation or Parent / Group / Govt. Support)
Sr. No.
Name of the companies
1
Odisha Coal and Power Limited.
2
Odisha Power Generation Corporation Limited
3
Government of Odisha
Contacts
List of instruments and names of regulators of the instruments
