Sai Lilagar Power Generation Limited

Brickwork Ratings assigns the long-term ratings for the Bank Loan Facilities of Rs. 266.77 Crs. of Sai Lilagar Power Generation Limited

Particulars

Facilities	Amount(Rs.Crs.)	Tenure	Rating	Regulator
Fund Based	266.77	Long Term	BWR BBB - /Stable Assignment	RBI
Grand Total	266.77	(Rupees Two Hundred Sixty Six Crores and Seventy Seven lakhs Only)

Note:
1. Please refer to BWR website www.brickworkratings.com for the definition of the ratings
2. Refer to Annexures I, II, and III for details of rated bank loan facilities, debt instruments, and the List of Entities Consolidated
*** Term Loan 1 outstanding is Rs. 56.77 Crore as of 1st August, 2026, and Term Loan 2 is disbursed up to Rs. 25.10 Crore out of the total sanctioned limit of Rs. 160 Crore as of 1st August, 2026. RATING ACTION / OUTLOOK

Brickwork Ratings (BWR) assigned a long-term rating of BWR BBB-/Stable for a total debt size of Rs. 266.77 Crore to Sai Lilagar Power Generation Limited (hereinafter referred to as ‘SLPGL’ or the ‘Company’)

The assigned rating reflects the operational and financial backing from the Indermani Group, which is engaged in the coal trading business. The company achieved operational stabilization following the acquisition through the National Company Law Tribunal (NCLT), and is further supported by power purchase agreements (PPAs) covering 83% of its capacity. However, the company remains vulnerable to open-market tariff fluctuations due to an untied capacity of approximately 17%. Although these executed PPAs are short-term in nature, the robust financial standing of the existing buyer ensures timely payments. SLPGL’s profitability is anticipated to improve following the recent execution of agreements for coal linkages.

SLPGL is undertaking a capex of a 43 MW coal-based thermal power plant at an estimated cost of Rs. 251.85 Crore. The project is financed via a debt-to-equity ratio of 1.75:1, with external borrowings of Rs. 160 crore already sanctioned. The remaining amount will be met through capital infusions from Indermani Group entities, supplemented by internal accruals if necessary. Commercial operations are slated to begin in April 2028; consequently, the company's leverage will remain sensitive to rating in the near to medium term. 

The stable outlook reflects the expectation that the company will continue to benefit from financial support by group companies and timely execution of the capex. 

 

 

KEY RATING DRIVERS

Credit Strengths:

• Medium-term revenue visibility with the presence of PPAs  – :

  SLPGL has medium-term power purchase agreements (PPAs) for ~84% of the operational project capacity of 43 MW in two different states, Maharashtra and Noida. It has two PPAs tied up with Manikaran Power Limited for 58% of the capacity for 3 years, with an expiry in 2028, and  26% of capacity for 4 years, expiring in 2030. The remaining 16% is to be sold in the merchant market. Following its acquisition, the company commenced commercial operations in May 2025 and generated a total operating revenue of Rs. 119.57 crores in FY26. The PPAs with Manikaran Power Limited have a two-part tariff structure, comprising non-escalable and escalable capacity and energy charges, providing revenue visibility to the company. This partially mitigates the offtake risks for the company. The two-part tariff structure enables the company to recover fixed charges, subject to meeting the normative operating efficiency parameters, supporting the profitability and debt coverage metrics.

• Coal supply agreement and synergies with Group Presence in Coal Mining and Coal Trading:   :

  The company’s total annual coal requirement is estimated at around 3 lakh MTPA, and it recently entered into an agreement to procure 85% of its fuel supply with SECL (South Eastern Coalfields Limited), a Miniratna subsidiary of Coal India Ltd.. Secondly, the group companies Indermani Minerals India Pvt Ltd (IMIPL) and Bhatia Energy & Minerals Limited (BEMPL) possess over a decade of experience in coal trading, logistics, beneficiation, and related services.  During FY26, 64% of the coal stock was purchased from group companies; hence, comfort is drawn from the availability of adequate coal supply. Through CIL and the connection with the Indermani Group, SLPGL leverages extensive advantages of easy accessibility of G9 to G15 grades coal supply.  

   

• Comfortable financial risk profile, characterised by comfortable debt coverage metrics and adequate liquidity – :

  The company’s debt coverage metrics remain strong, with the annual debt service coverage ratio (DSCR) remaining above 2.0x and the interest service coverage ratio (ISCR) over 3.0x, supported by healthy operating profitability of 24.01% in FY26 (Prov). This trend is likely to sustain, given the availability of   PPAs for the majority of the capacity, expected reduction in transportation cost due to coal linkages, and a favourable outlook on electricity demand growth. Tangible net worth is Rs. 101.14 Crores and interest-free unsecured loans of Rs. 40.16  Crores as on Mar 31, 2026. Gearing stood at 1.31x and total outstanding liabilities to net worth at 1.87x. Additionally, SLPGL’s robust liquidity, comprising healthy cash balances and proposed working capital limits, strengthens its financial risk profile.

Credit Risks:

• Lack of long-term PPAs for full capacity exposes profitability to volatility in short-term rates and coal prices - :

  The lack of long-term Power Purchase Agreements (PPAs) for the entire project capacity (83.72% tied up) subdued PLF levels during the last year. However, performance remained stable due to selling to the open market. The lowest PLF was 55.27% in May-2025 and the highest up to 91% in May-2026. Going forward, PLF levels are expected to remain largely above 85%.

  Since the full capacity is not tied up, the company faces tariff rate volatility risks in the open market. Furthermore, its profitability and cash flows remain vulnerable to pricing and availability risks associated with procuring coal. Consequently, sustaining improvements in operating performance depends heavily on the company's capacity to tie up new PPAs or renew medium-term agreements, alongside executing short-term sales at remunerative tariffs. These risks are partially mitigated by a comfortable counterparty financial risk profile of the existing buyer, ensuring timely payments.  

• Leverage to Increase with Significant Capex: :

  Out of the two acquired power plants, one has been operational since May 2025, whereas the other has been dismantled and scrapped. In place of the scrapped unit, the new management is implementing a capex plan to build a new 43 MW coal-based thermal power plant. The capex of the 43 MW coal-based power plant has an estimated cost of Rs. 251.85 Crore, funded via a debt-to-equity mix of 1.75:1. External borrowings amounting to Rs. 160 crore have secured sanction, whereas the balance will be funded through capital infusions by Indermani Group entities and internal accruals if required. The commercial operations are projected to commence from April 2028; hence, BWR expects that going forward, leverage will remain comfortably below 2.50x on a sustained basis.

   

ANALYTICAL APPROACH - Standalone

BWR has relied upon the standalone financials of  Sai Lilagar Power Generation Limited, publicly available information, and clarification/information provided by the management. Further, to arrive at its ratings, BWR has applied its rating methodology, as detailed in the Rating Criteria, as linked.

RATING SENSITIVITIES

Positive:

• Sustained operating performance with PLF remaining above the 85% level and further improving the financial risk profile with average DSCR above 2.25 times and gearing below 2.50x on a sustained basis.
• EBITDA margins increased above 30%, and an improvement in the current ratio improved to above 1.33x on a sustained basis. 

Negative:

• Larger-than-expected debt-funded capex, leading to a decline in average DSCR to below 1.50x over the debt tenure. 
• Delay in the execution of the capex plan or Material delay in payments from counterparties, adversely affecting liquidity. 

 

LIQUIDITY INDICATORS - Adequate

In the first year of commercial operation, the company reported net cash accruals of Rs. 18.75 crore on a provisional basis for FY26 and, going forward, expects to generate net cash accruals of Rs. 33 crore in FY27 & FY28 against the current maturities of debt of Rs. 9.73 crore. SLPGL had cash and bank balances, including a debt service reserve (DSR) of Rs.9.41 crore, along with unutilised working capital limits of Rs. 2.04  crore as on May 31, 2026. As per the debt-sanctioned terms, the company has created a liquidity reserve equivalent to one quarter of the scheduled debt and interest obligations, which shall provide an additional cushion to liquidity. The average utilization of the working capital limit is 87% for the past 12 months ending on 30 June 2026, and the proposed working capital limit of Rs. 20 Crore for capex will provide an additional cushion. However, the company has comfortable headroom available in terms of OPBDIT generation to meet its scheduled debt service requirements over the coming years. 

ABOUT THE ENTITY

Incorporated on April 23, 2004, Sai Lilagar Power Generation Limited (SLPGL) is a Chhattisgarh-based entity that operates two coal-fired thermal power plants, with a capacity of 43 MW each, located in Gopal Nagar (Champa), Chhattisgarh. Originally established by the KSK Group, SLPGL was later acquired by the Raipur-based Indermani Mineral Group in 2020, following the National Company Law Tribunal (NCLT )'s approval of its resolution plan. 

Of the two acquired power plants, one has been operational since May 2025, while the other has been dismantled and scrapped. In place of the scrapped unit, the new management is executing a capex plan to construct a new 43 MW coal-based thermal power plant. The project has an estimated cost of Rs. 251.85 Crore and is expected to commence commercial operations from April 2028.

ESG Profile

The company demonstrates an adequate ESG profile based on its environmental, social, and governance practices.

The environmental risks for coal-based power producers emanate from their exposure to fossil fuels with coal-based power plants being the leading emitters of pollutants and one of the largest industrial users of water. It is important for the power producers to comply with the emission and water consumption norms prescribed by the Government to avoid any disruption in operations or penalties for non-compliance.  The solid waste plant is being supplied to a nearby cement plant, and drugs are being supplied to an authorised recycler.  As informed by the company official, the operational plant is compliant with the emission norms, within the timeline provided by the Government. 

Also, the adverse impact of air pollution caused by coal-based power plants in nearby localities could trigger local criticism. The thermal power projects would also be exposed to labour-related risks and the risks of protests/social issues with local communities. The company has put in place a structure and conducts various certification programmes, safety audits and assessments to meet the enhanced safety requirements at its sites.

 

KEY FINANCIAL INDICATORS (Standalone)

Key Parameters	Units	FY 23 - 24 (Audited)	FY 24 - 25 (Audited)	FY 25 - 26 (Provisional)
Operating Revenue	Rs.Crs.	Not Available	Not Available	119.57
EBITDA	Rs.Crs.	-58.63	-15.18	28.71
PAT	Rs.Crs.	-76.88	-32.65	6.75
Tangible Net Worth	Rs.Crs.	119.97	87.85	101.14
Total Debt / Tangible Net Worth	Times	0.71	1.53	1.31
Current Ratio	Times	1.52	1.08	1.01

KEY COVENANTS OF THE FACILITY RATED

The key covenants are the standard terms as stipulated in the sanction letters of the rated facilities. 

STATUS OF NON-COOPERATION WITH PREVIOUS CRA

Not Applicable

RATING HISTORY FOR LAST THREE YEARS (including withdrawal and suspended)

Facilities	Current Rating  (2026)			2025		2024		2023
Type	Tenure	Amount (Rs.Crs.)	Rating	Date	Rating	Date	Rating	Date	Rating
Fund Based	LT	266.77	BWR BBB-/Stable (Assignment)	NA	NA	NA	NA	NA	NA
Grand Total		266.77	(Rupees Two Hundred Sixty Six Crores and Seventy Seven lakhs Only)

*** Term Loan 1 outstanding is Rs. 56.77 Crore as of 1st August, 2026, and Term Loan 2 is disbursed up to Rs. 25.10 Crore out of the total sanctioned limit of Rs. 160 Crore as of 1st August, 2026. Hyperlink/Reference to applicable Criteria

• General Criteria
• Approach to Financial Ratios
• Power-Power Generation Projects

Analytical Contacts
KunjalDabhi Associate Manager -Ratings kunjal.d@brickworkratings.com	Niraj Kumar Rathi Senior Director Ratings niraj.r@brickworkratings.com
Media Contact | media@brickworkratings.com	Client Support | clientsupport@brickworkratings.com

SL.No.	Name of the Bank/Lender	Type Of Facilities	Long Term(Rs.Crs.)	Short Term(Rs.Crs.)	Total(Rs.Crs.)	Complexity of the Instrument
1	HDFC Bank	Term Loan - Out-standing	56.77	_	56.77	Simple##
2	HDFC Bank	Term Loan - Sanctioned	160.00	_	160.00	Simple##
3	HDFC Bank	Working Capital (CC) - Sanctioned	30.00	_	30.00	Simple##
4	HDFC Bank	Working Capital (CC) - Proposed	20.00	_	20.00	Simple##
Total			266.77	0.00	266.77
TOTAL (Rupees Two Hundred Sixty Six Crores and Seventy Seven lakhs Only)

* Term Loan 1 outstanding is Rs. 56.77 Crore as of 1st August, 2026, and Term Loan 2 is disbursed up to Rs. 25.10 Crore out of the total sanctioned limit of Rs. 160 Crore as of 1st August, 2026.

## BWR complexity levels are meant for educating investors. The BWR complexity levels are available at www.brickworkratings.com / download / ComplexityLevels.pdf. Investors queries can be sent to info@brickworkratings.com.

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