RATING RATIONALE
03Dec2021

Andhra Pradesh Power Development Company Limited

Brickwork Ratings revises the ratings for the Bank Loan Facilities of Rs. 1500.00 Crs. of Andhra Pradesh Power Development Company Limited.

Particulars
Facilities** Amount (Rs.Crs.) Tenure Rating#
Previous Present Previous
(01 Dec 2020)
Present
Fund Based 1500.00 1500.00 Long Term BWR BB-/Negative
Downgrade and Change in Outlook
BWR C
Downgrade
Grand Total 1500.00 1500.00 (Rupees One Thousand Five Hundred Zero Crores Only)
#Please refer to BWR website www.brickworkratings.com for definition of the ratings
**Details of Bank Loan facilities,consolidation or instruments are provided in Annexure
Note: Apart from the rated facilities, the company has availed term loan facilities from Financial institutions, which are not being rated by BWR.


RATING ACTION / OUTLOOK

Brickwork Ratings (BWR) downgrades the ratings of Andhra Pradesh Power Development Company Limited (APPDCL or the company) considering  delays in servicing the debt obligations which are not being rated by BWR. Hence, on cross-default basis, the rated facilities have been downgraded to BWR C. The ratings are also constrained by weak debt service coverage indicators, high debt-equity levels, and delay in the realization of receivables. The ratings are partially offset by the parentage   and the improvement in tangible net worth and operating profitability margins. 

KEY RATING DRIVERS

Credit Strengths:


Credit Risks:

ANALYTICAL APPROACH - Standalone

To arrive at its ratings, BWR has relied on the standalone financials of the company. BWR has applied its rating methodology as detailed in the Rating Criteria (hyperlinks provided at the end of this rationale).

RATING SENSITIVITIES

Going forward, the ability of the company to generate adequate cash flows for meeting its debt obligations, the timely realization of its debtors, and meeting the debt obligations on time will be the key rating sensitivities.

LIQUIDITY INDICATORS - Poor

The liquidity position is poor. The Company is not generating adequate cash accruals to meet its debt obligations. During FY21, the company has generated net cash accruals of Rs.62.54 Cr as against the debt obligations of Rs. 1132.44 Crs. However, the company is relying on short-term to medium-term loans to meet its debt obligations. As of 31 March 2021, the cash and cash equivalents were reported at Rs.  405.17 Crs

ABOUT THE ENTITY

Andhra Pradesh Power Development Company Limited (APPDCL) was incorporated on 1-March-2006. APPDCL is a subsidiary of Andhra Pradesh Power Generation Corporation Limited (APGENCO). APPDCL is a Special Purpose Vehicle formed by Andhra Pradesh Power Generation Corporation Limited (APGENCO) to undertake the development of Sri Damodaram Sanjeevaiah Thermal Power Station (SDSTPS) (2x800 MW). APPDCL has commissioned and commenced operations of its 1st stage of 2*800MW units on Feb 5, 2015, for unit-I (1*800MW) and for Unit-II on 24 Aug 2015 (1*800MW). 

KEY FINANCIAL INDICATORS (Standalone)
Key Parameters Units FY 20-21
(Audited)
FY 19-20
(Audited)
Operating Revenue Rs.Crs. 3645.18 3439.26
EBITDA Rs.Crs. 1412.94 1065.25
PAT Rs.Crs. -106.92 -431.26
Tangible Net Worth Rs.Crs. 475.30 98.25
Total Debt/Tangible Net Worth Times 40.07 192.96
Current Ratio Times 0.89 0.82
KEY COVENANTS OF THE FACILITY RATED

The terms of sanction include standard covenants normally stipulated for bank loan facilities for availing the working capital loans.


NON-COOPERATION WITH PREVIOUS CREDIT RATING AGENCY

On account of inadequate information and lack of management cooperation, CRISIL has migrated the rating on bank facility of APPDCL to 'CRISIL B-/Stable Issuer Not Cooperating' as on 30-Jul- 2018, and further it was reaffirmed at ‘CRISIL B-/Stable Issuer Not Cooperating’ as on 30-Oct-2019 and on 29-Jan-2021. 

ANY OTHER INFORMATION

NA

RATING HISTORY FOR THE PREVIOUS THREE YEARS (including withdrawal and suspended)
Facilities Current Rating (2021) 2020 2019 2018
Type Tenure Amount
(Rs.Crs.)
Rating Date Rating Date Rating Date Rating
Fund Based LT 1500.00
BWR C
(Downgrade)
01Dec2020
BWR BB-Negative
(Downgrade and Change in Outlook)
08Nov2019
BWR BBStable
(Reaffirmation)
05Sep2018
BWR BBStable
(Assignment)
Grand Total 1500.00 (Rupees One Thousand Five Hundred Zero Crores Only)
COMPLEXITY LEVELS OF THE INSTRUMENTS - Simple

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.

Hyperlink/Reference to applicable Criteria
Analytical Contacts

Sowmya Yatham

Manager - Ratings Board : +91 80 4040 9940 sowmya.y@brickworkratings.com

Vipula Sharma

Director - Ratings Board : +91 80 4040 9940 vipula.s@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com
Andhra Pradesh Power Development Company Limited
ANNEXURE-I
Details of Bank Facilities rated by BWR
SL.No. Name of the Bank/Lender Type Of Facilities Long Term(Rs.Crs.) Short Term(Rs.Crs.) Total(Rs.Crs.)
1 State Bank Of India (SBI) Cash CreditSanctioned 500.00 _ 500.00
2 Un tied portion Working Capital (CC)Proposed 600.00 _ 600.00
3 Union Bank of India Cash CreditSanctioned 400.00 _ 400.00
Total 1500.00 0.00 1500.00
TOTAL (Rupees One Thousand Five Hundred Zero Crores Only)
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About Brickwork Ratings

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