Soham Phalguni Renewable Energy Private Limited (SPREPL) was incorporated in the year 2002. The company is is promoted by Mr. Suchindra Sadananda Shetty and family. SPREPL is an entity under the Soham Group and a subsidiary of Soham Renewable Energy India Private Limited and is engaged in power generation. The company is running 10.5 MW mini hydel power plants at Gurupur Stream of Nethravathi River (downstream to Mannapitlu project) in Dakshina Kannada district in Karnataka. The company has commenced commercial production on June 27, 2015. It is a part of Soham group and is a subsidiary company of Soham Renewable Energy India Private Limited (~52%) and Ambuthirtha Power Private Limited (~48%).

Soham Group was established in the year 1991, with Soham Renewable Energy India Private Limited (MW6) being the flagship company of the group. Soham Group operates hydro power projects with a cumulative capacity of 53.5 MW in Karnataka. Other entities are Ambuthirtha Power Private Limited (MW22.0) and Soham Phalguni Renewable Energy Private Limited (MW10.50). The entities in the group have long term power purchase agreements (PPA) with several DISCOMs and corporates based out of Karnataka.

Acuite has considered Standalone approach to arrive at this rating, as the group consists of Soham renewable Energy India Private Limited, Soham Phalguni Renewable Energy private Limited, Ambuthirtha Power Private Limited and Soham Mannapitlu Private Limited. All the companies has plants located at various locations, have different capacity levels, having different counterparties and power purchase agreements (PPA).

• ­Timely receipt of payments from MESCOM

• Improvement in power generation

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Liquidity position of the company improved in FY22. SPREPL has adequate NCA’s  of  Rs.4.65Cr to repay its Debt obligations of Rs.3.20Cr in FY22. Going forward, the net cash accruals are expected to improve marginally. Further, the promoters have been infusing capital over the period to support the operations of the company in the form of unsecured loans. The promoters have also started maintaining Debt service reserve mount (DSRA) under Ambuthirtha Power Private Limited for SPEEPL. Acuite believes that with SPREPL liquidity position will remain adequate in the medium term on account of assured cash flows and power purchase agreement (PPA) with government.

Acuité believes that SREIPL will maintain a ‘Stable’ outlook on account of the low off take risk arising due to the enforcement of the Power Purchase Agreements (PPA), extensive experience of the management in the renewable power sector and support from group companies. The outlook may be revised to 'Positive' in case of higher than expected PLF leading to higher cash accruals. Conversely, the outlook may be revised to 'Negative' in case of any significant drop in power generation levels, or any significant delay in receivables or any unplanned debt funded capital expenditure leading to deterioration of its financial risk profile and liquidity.

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­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.