Press Release May 22, 2026 TELANGANA STATE WATER RESOURCES INFRASTRUCTURE DEVELOPMENT CORPORATION LIMITED Rating Downgraded

Product	Quantum (Rs. Cr) (SEBI)	Quantum (Rs. Cr) (Other FSR)	Long Term Rating	Short Term Rating	Regulated By
Bank Loan Ratings	0.00	17000.00	ACUITE A | Stable | Downgraded	-	RBI
Total Outstanding	0.00	17000.00	-	-	-
Total Withdrawn	0.00	0.00	-	-	-

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

­Acuité has downgraded its long-term rating to ‘ACUITE A’ (read as ACUITE A) from ‘ACUITE A+’ (read as ACUITE A plus) on the Rs.17000.00 Cr. bank facilities of Telangana State Water Resources Infrastructure Development Corporation Limited (TSWRIDCL). The outlook is ‘Stable'. Rationale for downgrade: The rating downgrade considers the lack of progress in the ongoing projects from September 30, 2024 to February 28, 2026, mainly due to budgetary constraints and land acquisition issues. The rating considers the strategic and economic importance of the ongoing projects for Government of Telangana (GoT) and unconditional and irrevocable guarantee provided by the Government of Telangana (GoT) along with strong economic management and financial risk profile of of GoT. However, the rating remained constrained by exposure to project implementation risk, including time and cost overrun.

About the Company

­The Government of Telangana (GoT) has incorporated a Special Purpose Vehicle (SPV) named Telangana State Water Resources Infrastructure Development Corporation Limited (TSWRIDCL) or “the Company”, or “the Corporation”) on April 26, 2018. TSWRIDCL is 100% owned by the state government and runs irrigation projects aimed at developing drought-prone uplands and backward areas of Telangana. The irrigation projects undertaken by TSWRIDCL consist of Indiramma Flood Flow Canal Project (FFC), J. Chokka Rao Devadula Lift Irrigation Scheme and Thupakulagudem Barrage (DT or Devadula Thupakulagudem) and Sita Rama Lift Irrigation Project (SR or SRLI). Al three projects together will handle around 200 TMC of water annualy to serve 11.18 lakh acres of new ayacut and stabilize around 10.47 lakh acres, other than supplying 10 TMC of water for industrial use and 8 TMC for domestic purposes. The total project costs of three projects are estimated at Rs. 47,222.88 Cr, which is proposed to be funded by an equity/grant of Rs. 26708.21 Cr. from GoT and debt of Rs. 20514.67 Cr. from commercial banks and FIs. The Flood Flow Canal Project and the Devadula Thupakulagudem Project commenced commercial operations with critical components from March 2022. The third project, the Sitarama Lift Irrigation Project, commenced commercial operations with critical components from March 2023. The company’s current board of directors are Mr. Cheeti Muralidhar, Mr. Rajat Kumar, Mr. Nunavath Shankar, Mr. Sriram Mohan Rao Gundavarapu, Mr. Jonnada Surya Prakash, Mr. Shankar Bhuram, Mr. Srinivas Reddy Aileni and Mr. Sudhakar Reddy Adamala.

Unsupported Rating

­ACUITE BB+/Stable

Analytical Approach

­To arrive at the rating, Acuité has considered the standalone business and financial risk profiles of TSWRIDCL and Acuite has also factored in the financial support from government of Telangana (GoT) by the way of unconditional and irrevocable guarantee for the timely payment of both principal and interest of the rated debt.

Key Rating Drivers

Strengths

Strategic and economic importance of the ongoing project for Government of Telangana (GoT) TSWRIDCL is a special purpose vehicle (SPV) created by the Government of Telangana (GoT) with an objective to develop the drought-prone upland and backward areas of Telangana State by providing water for irrigation, drinking, and industrial requirements. The project is expected to provide 200 TMC of water annually to serve 11.18 lakh new Ayacuts and stabilize around 10.47 lakh, other than supplying 10 TMC of water for industrial use. The project further enhances the irrigation potential in Telangana and the upkeep of the existing projects to enhance the agriculture productivity per unit of water with increased water use efficiency. All the available water resources for the benefit of the agricultural sector, the industrial sector, and also providing drinking water for the overall development of Telangana State. The project additionally supports the ‘Mission Kakatiya’ and ‘Mission Bhagiratha’ schemes designed to provide drinking water to many villages while improving the capacities for farmers to sow two crops. TSWRIDCL divided the entire project into three parts based on its coverage area and connectivity. The Telangana government has awarded the project for execution to reputed companies like Megha Engineering & Infrastructures Limited (MEIL), BVSR Constructions Private Limited, and Navayuga Engineering Company Limited (NECL), among others. The project is being undertaken by GoT and is therefore likely to pose implementation challenges like land acquisition, timely execution, and any cost overruns. However, these risks are mitigated by strong government support. Acuite rating is also based on expectations of strong explicit government support for the project through an unconditional and irrevocable state government guarantee. Presence of Government Guarantee The GoT has provided an unconditional, irreversible, and irrevocable guarantee for both principal and interest payments of the term loans until repayment. TSWRIDCL, being its 100 percent owned company, shall also guarantee the funding of cost overruns (if any). Strong economic growth of Telangana state Telangana has exhibited strong economic growth since its formation, with recent estimates indicating a GSDP growth rate of around 10.7% in 2025–26, significantly outperforming the national average. In FY24, its GSDP is projected at Rs. 15.02 lakh crore, up from Rs. 13.12 lakh crore in FY23. The state’s contribution to India’s GDP has risen from 4.1% in FY2015 to 5.1% in FY24, despite having only 2.8% of the national population. The services sector dominates, contributing 68.8% to GSVA, with strong growth in finance, real estate, and professional services. Per capita income has surged from Rs. 91,121 in FY2011-12 to Rs. 356,564 in FY2023-24, placing Telangana third in the nation after Sikkim and Delhi. Telangana’s fiscal profile continues to reflect healthy revenue mobilisation, with revenue receipts estimated to grow by around 18% year-on-year in FY2026, supported by a steady increase in tax revenues of about 10%. The state has maintained fiscal discipline, with a revenue surplus of 0.3% of GSDP and fiscal deficit contained at around 3% of GSDP. Telangana’s per capita income has risen to Rs. 4,18,931 in FY2026, registering a growth of 10.2%, significantly higher than the national growth rate of 6.9%. The state continues to outperform the national average, with per capita income remaining nearly 1.9 times higher, reflecting sustained improvements in income levels and economic productivity. Telangana ranks among the top states in terms of per capita income, with PCI estimated at Rs. 4,18,931 in FY2026, remaining significantly higher than the national average (about 1.9 times), though exact rank positioning may vary marginally year-on-year. The state continues to demonstrate strong revenue mobilisation, with total revenue receipts estimated at around Rs. 2.42 lakh crore in FY2026, reflecting a robust 18% year-on-year growth. Out of the total revenue receipts, tax revenue constitutes the major share at Rs. 1.48 lakh crore, while non-tax revenue is estimated at around Rs. 0.35 lakh crore, reflecting a moderate contribution from non-tax sources.

Weaknesses

Exposure to project implementation risk, including time and cost overruns The project cost of the 3 projects being undertaken by TSWRIDCL is Rs. 47,222.88 Cr, which was proposed to be funded by equity/grant of Rs. 26,708.23 Cr. (56.56%) from GoT and debt of Rs. 20,514.67 Cr. (43.44%) from commercial banks and financial institutions (FIs). As of February 28, 2026, the total capital expenditure incurred by the company towards the project was Rs. 39,336.91 Cr. (~83 percent), funded by Rs. 14,219.69. Cr. of debt from commercial banks and FIs and Rs. 24,970.96 Cr. of equity/grant from GoT. The physical progress project is around 83 percent completed as on February 28, 2026. The flood flow canal project cost is estimated at Rs. 12624.20 Cr, which is to be funded by an equity/grant of Rs. 7459.4 Cr. from GoT and debt of Rs. 5164.80 Cr. from commercial banks and FIs. As on September 30, 2024, the total capital expenditure incurred by the company towards the project was Rs. 11,682 Cr. (~93 percent), which is funded by Rs. 7,866.4 Cr. of equity/grant from GoT and Rs. 3669.34 Cr. of debt from commercial banks and FIs. Physical progress is at ~93 percent as on February 28, 2026. All major elements of the project have been completed, and DCCO of the project commenced in March 2022. The Devadula-Tupakulagudem project cost is estimated at Rs. 18,245.90 Cr, which is proposed to be funded by an equity/grant of Rs. 10,858.21 Cr. from GoT and debt of Rs. 7387.72 Cr. from commercial banks and FIs. As on February 28, 2026, the total capital expenditure incurred by the company towards the project was Rs. 17,360.92 Cr. (~95 percent) funded by Rs. 12,148.71 Cr. (which includes the interest during construction for the delay in DCCO of Rs. 583.43 Cr.) of equity/grant from GoT and Rs. 5,212.21 Cr. of debt from commercial banks and FIs. Physical progress is at ~95 percent as on February 28, 2026. All major elements of the project have been completed, and DCCO of the project achieved in March 2022. Management is expecting to complete this project in the near term. The Sita Rama Lift Irrigation project cost is estimated at Rs. 16,352.78 Cr, which is proposed to be funded by an equity/grant of Rs. 8390.30 Cr. from GoT and debt of Rs. 7962.15 Cr. from commercial banks and FIs. As on February 28, 2026, the total capital expenditure incurred by the company towards the Project was Rs. 10,293.99 Cr. (~63 percent), funded by Rs. 4955.85 Cr. (which includes the interest during construction for the delay in DCCO of Rs. 583.43 Cr.) of equity/grant from GoT and Rs. 5338.18 Cr. of debt from commercial banks and FIs. Physical progress is at ~63 percent as on February 28, 2026. All major elements of the project have been completed, and DCCO of the project achieved in March 2023. All these projects have shown no progress since September 30, 2024 till February 28, 2026, mainly due to budgetary constraints and land acquisition issues. Acuité believes that the ability of the company to execute the project as per timelines without any cost overruns and commencement of revenue booking will remain as a key rating sensitivity.

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)

­TSWRIDCL is fully owned by Government of Telangana (GoT). GoT extends financial support from Government of Telangana (GoT) by the way of unconditional and irrevocable guarantee for the timely payment of both principal and interest of the rated debt. Stress scenario: Acuite believes that the support from the GoT will continue in the form of timely payment of both principal and interest of the rated debt even in stress scenario.

ESG Factors Relevant for Rating

­The ESG profile of Telangana State Water Resources Infrastructure Development Corporation Limited is supported by its core mandate of developing irrigation and water management infrastructure, which contributes positively to environmental sustainability and agricultural productivity. Environmental risks are moderate, given the nature of infrastructure projects, but are partly mitigated through focus on water conservation, groundwater recharge, and climate-resilient irrigation systems. Social factors are strong, as the corporation enhances rural livelihoods, supports farmer income stability, and improves water accessibility. Governance is anchored by its status as a state government-owned entity, ensuring regulatory oversight, structured decision-making, and financial support, although disclosures on ESG frameworks and sustainability metrics remain evolving.

Rating Sensitivities

Potential triggers (individual or collective) for an upward rating action:

Completion of projects and commencement of revenue booking without any cost overruns Improvement in credit profile of Telangana Government and timely support to TSWRIDCL by repayment of debt of Rs. 650 Cr yearly

Potential triggers (individual or collective) for a downward rating action:

Further elongation in commencement of revenue booking or significant cost overrun Significant decline in Credit profile of Telangana Government with with fiscal deficit below 3.50% of GSD

Liquidity Position

Adequate

TSWRIDCL’s projects have commenced operations; however, the projects are yet to be completed entirely. The company as on February 28, 2026, has incurred ~84% of the total project cost, and the balance is expected to be completed over the medium term. TSWRIDCL is expected to be supported by the Government of Telangana (GoT) in the form of grants and/or loans from commercial banks and FIs. Further, its liquidity position is supported by the strong operational and financial support from the Government of Telangana.

Outlook: Stable

­

Other Factors affecting Rating

­None.

Key Financials

Particulars	Unit	FY 25 (Provisional)	FY 24 (Provisional)
Operating Income	Rs. Cr.	2.15	0.00
PAT	Rs. Cr.	(3029.61)	(2369.87)
PAT Margin	(%)	(140912.01)	0.00
Total Debt/Tangible Net Worth	Times	64.90	7.17
PBDIT/Interest	Times	0.04	0.02

*

­Statutory Audit for FY2024 is yet to be completed. .    gg

Status of non-cooperation with previous CRA (if applicable)

­Not applicable.

Any other information

­None.

Applicable Criteria

• Default Recognition :- https://www.acuite.in/view-rating-criteria-52.htm • Infrastructure Sector: https://www.acuite.in/view-rating-criteria-51.htm • Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm • Group And Parent Support: https://www.acuite.in/view-rating-criteria-47.htm • State Government Ratings : https://www.acuite.in/view-rating-criteria-26.htm

Note on complexity levels of the rated instrument

­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.

Rating History

Date Name of Instruments/Facilities Term Amount (Rs. Cr) Rating/Outlook 21 Feb 2025 Term Loan Long Term 13516.28 ACUITE A+ | Stable (Upgraded from ACUITE BB+) Term Loan Long Term 450.00 ACUITE A+ | Stable (Upgraded from ACUITE BB+) Proposed Long Term Loan Long Term 783.72 ACUITE A+ | Stable (Upgraded from ACUITE BB+) Term Loan Long Term 1000.00 ACUITE A+ | Stable (Upgraded from ACUITE BB+) Term Loan Long Term 800.00 ACUITE A+ | Stable (Upgraded from ACUITE BB+) Term Loan Long Term 450.00 ACUITE A+ | Stable (Upgraded from ACUITE BB+) 23 Oct 2024 Term Loan Long Term 13516.28 ACUITE BB+ (Downgraded & Issuer not co-operating* from ACUITE A+ | Stable) Term Loan Long Term 1700.00 ACUITE BB+ (Downgraded & Issuer not co-operating* from ACUITE A+ | Stable) Proposed Long Term Loan Long Term 783.72 ACUITE BB+ (Downgraded & Issuer not co-operating* from ACUITE A+ | Stable) Term Loan Long Term 1000.00 ACUITE BB+ (Downgraded & Issuer not co-operating* from ACUITE A+ | Stable) 03 Aug 2023 Term Loan Long Term 13516.28 ACUITE A+ | Stable (Reaffirmed) Term Loan Long Term 1700.00 ACUITE A+ | Stable (Reaffirmed) Proposed Long Term Loan Long Term 783.72 ACUITE A+ | Stable (Reaffirmed) Term Loan Long Term 1000.00 ACUITE A+ | Stable (Reaffirmed)

­

*Annexure 2 - List of Entities (applicable for Consolidation or Parent / Group / Govt. Support)

Sr. No. Company Name 1 GOVERNMENT OF TELANGANA 2 TELANGANA STATE WATER RESOURCES INFRASTRUCTURE DEVELOPMENT CORPORATION LIMITED ­

Contacts

Mohit Jain Chief Analytical Officer - Rating Operations Moparthi Anuradha Devi Senior Analyst - Rating Operations	Contact details exclusively for investors and lenders Mob: +91 8591310146 Email ID: analyticalsupport@acuite.in

List of instruments and names of regulators of the instruments

As required by SEBI Circular (SEBI/HO/DDHS/DDHS-PoD-2/I/4685/2026) dated February 10, 2026, a list of activities or instruments falling under the purview of various Financial Sector Regulators (FSRs), along with the names of respective FSRs, is being disclosed below: A. Rating Activity:   Sr. No. Instrument / activity Name Regulator of the instrument 1 Listed/Proposed to be listed Bonds/Debentures/Preference Shares (all securities) SEBI 2 Unlisted/Proposed to be unlisted Bonds/Debentures/ Preference share (all securities) MCA 3 Listed PTCs / Securitisation Notes (originated by entities regulated by RBI)1 SEBI 4 Listed PTCs / Securitisation Notes (originated by entities not regulated by RBI)1 SEBI 5 Unlisted PTCs / Securitisation Notes (originated by entities regulated by RBI)1 RBI 6 Listed Commercial Paper and NCDs with original maturity less than 1 year RBI 7 Unlisted Commercial Paper and NCDs with original maturity less than 1 year RBI 8 Loan Facilities (Fund/Non-Fund Based) from Bank / NBFCs/ NHB/ FIs 2 RBI 9 External Commercial Borrowings and other similar borrowings RBI 10 Certificates of Deposit RBI 11 Fixed Deposits raised by NBFCs, Banks, HFCs, FIs RBI 12 Fixed Deposits raised by corporates other than NBFCs, Banks, HFCs, FIs MCA 13 Inter Corporate Deposits/Loans extended by Corporates MCA 14 Borrowing programme 3 - 15 Issuer Ratings 4 - 16 Credit Ratings for Capital Protection Oriented Schemes (by Mutal Funds and AIFs) SEBI 17 Credit quality ratings (CQRs) for Mutual Fund Schemes and Schemes of AIFs SEBI 18 Listed Security Receipts SEBI 19 Unlisted Security Receipts RBI 20 Independent Credit Evaluation (ICE) RBI 21 Expected Loss Ratings (For Loan Facilities [Fund/Non-Fund based] from Banks/NBFCs/NHB/FIs) RBI 22 Expected Loss Ratings (Listed / Proposed to be listed Bonds / Debentures / Preference Shares (all securities)) SEBI 23 Expected Loss Ratings (Unlisted / Proposed to be unlisted Bonds/ Debentures / Preference Shares (all securities)) MCA 24 Unlisted PTCs / Securitisation Notes (originated by entities not regulated by RBI) 1 Investor-side Regulator such as IRDAI, PFRDA 5   1 Includes securitisation transactions involving assignee payout, acquirer's payout. 2 Includes bank facilities such as liquidity facility, second loss facility that are part of securitisation transactions. 3 The rated instrument may involve issuance of different instruments such as debt securities (listed or otherwise), bank loans, commercial paper (listed or otherwise), etc. The regulator of the instrument may accordingly be SEBI, RBI or MCA and can only be determined upon issuance. In Press Release(s) subsequent to issuance(s), Acuite shall separately capture the rated quantum details along with names of respective regulators. 4 There is no instrument being rated and hence, Regulator of the Instrument is not applicable. The rating scale and definitions are being followed as stipulated in SEBI Master Circular for CRAs. 5 These ratings were assigned during regulatory regime prior to the introduction of SEBI CRA Circular dated Feb 10, 2026 and accordingly, investor side regulators have been included.   B. Other activities:   Sr. No. Activity Name Regulator of the activity 1 Monitoring Agency SEBI 2 Research activities, incidental to rating, such as research for Economy, Industries and Companies 6 Not applicable 6 permitted by SEBI vide SEBI Master Circular for CRAs. Disclosure on instruments / activities and names of regulators: A list of products/activities or ratings of instruments falling under the purview of various financial sector regulators (FSRs) along with the names of respective FSRs has also been duly disclosed by Acuite on its website. A link to the same has been provided below for ready reference: https://acuite.in/Activities-and-Regulators.html   About Acuité Ratings & Research­ Acuité is a full-service Credit Rating Agency registered with the Securities & Exchange Board of India (SEBI). The company received RBI Accreditation as an External Credit Assessment Institution (ECAI) for Bank Loan Ratings under BASEL-II norms in the year 2012. Acuité has assigned ratings to various securities, debt instruments and bank facilities of entities spread across the country and across a wide cross section of industries. It has its Registered and Head Office in Kanjurmarg, Mumbai. Disclaimer: An Acuité rating does not constitute an audit of the rated entity and should not be treated as a recommendation or opinion that is intended to substitute for a financial adviser's or investor's independent assessment of whether to buy, sell or hold any security. Ratings assigned by Acuité are based on the data and information provided by the issuer and obtained from other reliable sources. Although reasonable care has been taken to ensure that the data and information is true, Acuité, in particular, makes no representation or warranty, expressed or implied with respect to the adequacy, accuracy or completeness of the information relied upon. Acuité is not responsible for any errors or omissions and especially states that it has no financial liability whatsoever for any direct, indirect or consequential loss of any kind, arising from the use of its ratings. Ratings assigned by Acuité are subject to a process of surveillance which may lead to a revision in ratings as and when the circumstances so warrant. Please visit our website (www.acuite.in) for the latest information on any instrument rated by Acuité. Please visit https://www.acuite.in/faqs.htm to refer FAQs on Credit Rating. Note: None of the Directors on the Board of Acuité Ratings & Research Limited are members of any rating committee and therefore do not participate in discussions regarding the rating of any entity.