­Pioneer Genco Limited was incorporated in 2001, Its own a 2x24.75MW small hydro power plant in Hyderabad. Mr Satish Reddy Katta, Mr Sailesh Reddy, Mr Deepthi Reddy Puttam Reddy, Mr Ramesh Reddy Puttamreddy are the Directors of Pioneer Genco Limited. Unit one is located on cauvery river and unit two is located on Krishna river. Both the plants have long term agreement with BESCOM.

­Pioneer Group consist of Pioneer Genco Limited (PGL) and Pioneer Power corporation Limited (PPCL) which are subsidiaries to Penna group. Pioneer group engaged in hydel power generation. The group has 4 small hydro power plants with the generation capacity of 24.75 Mega Watt (MW), unit 1 of PGL and unit 1 of PPCL were located on Cauvery river and unit 2 of PGL and unit 2 of PPCL were located on Krishna river in Karnataka region. Unit one of PPCL has long term PPA with BESCOM and Unit two has multiple short term PPAs with reputed companies including Bangalore international airport, Ultra Tech cements, Mylan labs Ltd, Shahi exports Pvt Ltd etc. While both units of PGL has long term PPA's with BESCOM.

­Renewable energy projects are typically considered environmentally friendly, thereby contributing to the reduction of greenhouse gases (GHGs) including carbon emissions. Hydro power is an older renewable energy technology that contributes significantly to global power generation, and is used for baseload electricity generation, replacing traditional baseload sources such as coal and nuclear power. However, hydro power projects involving construction of dams are large, require years of construction, involve massive deforestation, divert river flow, and affect local communities. Such large land use can potentially alter the ecosystem and hurt the environment. The run-of river hydro power plants, because of their lack of large reservoirs have less environmental impact. However, it disrupts the longitudinal connectivity by fragmenting the river. Also, the consequences of climate change can adversely impact power generation from these sustainable sources. The changes can cause greater variability in the water flows and river levels. Ensuring resilience to climate change risk may require future adaptation to relevant technologies, thereby increasing overall maintenance costs.

• Improvement in power generation leading to improvement in financial risk profile and liquidity of the group.

• Significant delay in receiving payments from beneficiaries, leading to deterioration in liquidity profile.

In FY2024, Pioneer group’s liquidity position was adequate as reflected from the timely repayment of debt obligations, despite insufficient net cash accruals against the debt repayment obligations. The group had registered NCA’s of ~Rs.56 Cr. during FY2024, which was insufficient to repay Rs.78.55 Cr. debt obligations for the same period. However, realization of significant portion of pending debtors has helped in timely repayment of debt during the year. Going forward, pioneer group is expected to generate net cash accruals in the range of Rs.80 to 90 Cr, which would be sufficient to meet the debt repayment obligation range of Rs.78.00 Cr. to 86 Cr.  in the medium term. Furthermore, presence of a DSRA equivalent to 1 quarter of principal and interest provides cushion towards liquidity. The group is expected to the create balance portion of DSRA in the current year which will further strengthen the liquidity. Besides, all the receipts of BESCOMs are routed through TRA account, which ensures that 50 percent of the amount to be prioritized towards repayment and balance towards other expenses, thus, ensuring timely repayment.

­Acuité believes that the outlook of Pioneer group will remain 'Stable' over the medium term on account of the promoter’s extensive experience and established presence. The outlook may be revised to 'Positive' in case the group registers significant growth in Plant load factor (PLF) leading to improvement in financial risk profile. Conversely, the outlook may be revised to 'Negative' in case of any further decline in plant Load factor (PLF) or any significant delay in receivables leading to further deterioration in liquidity position of the group.

­­In order to inform the investors about complexity of instruments, Acuité has categorized such instruments in three levels: Simple, Complex and Highly Complex. Acuite’ s categorisation of the instruments across the three categories is based on factors like variability of the returns to the investors, uncertainty in cash flow patterns, number of counterparties and general understanding of the instrument by the market. It has to be understood that complexity is different from credit risk and even an instrument categorized as 'Simple' can carry high levels of risk. For more details, please refer Rating Criteria “Complexity Level Of Financial Instruments” on www.acuite.in