RATING RATIONALE
03Dec2021

Andhra Pradesh Power Generation Corporation Ltd.

Brickwork Ratings revises the ratings for the Bank Loan Facilities of Rs. 4204.22 Crs. of Andhra Pradesh Power Generation Corporation Ltd.

Particulars
Facilities** Amount (Rs.Crs.) Tenure Rating#
Previous Present Previous
(01 Mar 2021)
Present
Fund Based 3904.22 3904.22 Long Term BWR BBB+/Stable
Reaffirmation
BWR C
Downgrade
Non Fund Based 300.00 300.00 Short Term BWR A2
Reaffirmation
BWR A4
Downgrade
Grand Total 4204.22 4204.22 (Rupees Four Thousand Two Hundred Four Crores and Twenty Two lakhs 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 Generation Corporation Limited (APGENCO or the company) considering delays in servicing the debt obligations which are not being rated by BWR. Hence, on cross-default recognition, the rating for the bank loan facilities has been downgraded to BWR C/A4. The ratings are constrained by high debt-equity levels, the company availing short- to medium-term loans to meet mismatch in cash flows, and the delay in the realization of the outstanding receivable position and the company’s exposure to regulatory risks.  However, the ratings are partially offset by the strong parentage considering the company is wholly owned by the Government of Andhra Pradesh (GoAP) and experienced management. 

KEY RATING DRIVERS

Credit Strengths:


Credit Risks:

ANALYTICAL APPROACH - Standalone

To arriving at its ratings, BWR has considered the standalone financials of the company with support from the State Government . 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

APGENCO has not generated adequate cash flows from operations for repaying its debt obligations. The company has been increasing borrowings for meeting these shortfalls. The company has reported a cash balance of Rs. 8.32 Crs as of 31 March 2020. Although the liquidity indicators were reported at poor levels, the company has been supported by the state government of Andhra Pradesh which owns the entire shareholding in the company. 

ABOUT THE ENTITY

Andhra Pradesh Power Generation Corporation Limited (APGENCO ) was formed after unbundling the erstwhile AP State Electricity Board (APSEB) into APTRANSCO and APGENCO under the AP Electricity Reforms Act, 1998, on 01 Feb 1999. As per AP Re-organisation Act, 2014, a separate state-generating corporation was created with effect from 2 June 2014 for the state of Telangana. APGENCO was bifurcated into APGENCO (Residuary) and Telangana Generation Corporation Limited (TSGENCO). The power projects located in Telangana have been transferred to TSGENCO with effect from 2 June 2014. The projects located in the residual AP remained with APGENCO. APGENCO has an installed capacity of 5613.026MW, consisting of thermal-3410MW, hydel-1797.60MW, and solar-405.426 MW.

KEY FINANCIAL INDICATORS (Standalone)
Key Parameters Units FY 19-20
(Audited)
FY 18-19
(Audited)
Operating Revenue Rs.Crs. 10053.35 9735.39
EBITDA Rs.Crs. 3148.25 2432.98
PAT Rs.Crs. 10.05 24.89
Tangible Net Worth Rs.Crs. 4026.14 4016.25
Total Debt/Tangible Net Worth Times 5.53 5.13
Current Ratio Times 1.75 1.62
KEY COVENANTS OF THE FACILITY RATED

The terms of sanction include standard covenants normally stipulated for bank loan facilities


NON-COOPERATION WITH PREVIOUS CREDIT RATING AGENCY

Nil

ANY OTHER INFORMATION

Nil

RATING HISTORY FOR THE PREVIOUS THREE YEARS (including withdrawal and suspended)
Facilities Current Rating (2021) 2021 (History) 2020 2019 2018
Type Tenure Amount
(Rs.Crs.)
Rating Date Rating Date Rating Date Rating Date Rating
Fund Based LT 3904.22
BWR C
(Downgrade)
01Mar2021
BWR BBB+Stable
(Reaffirmation)
21Jan2020
BWR BBB+Stable
(Downgrade)
29Mar2019
BWR AStable
(Reaffirmation)
NA
NA
Non Fund Based ST 300.00
BWR A4
(Downgrade)
01Mar2021
BWR A2
(Reaffirmation)
21Jan2020
BWR A2
(Downgrade)
29Mar2019
BWR A2+
(Reaffirmation)
NA
NA
Grand Total 4204.22 (Rupees Four Thousand Two Hundred Four Crores and Twenty Two lakhs 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 Generation Corporation Ltd.
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 Andhra Bank Cash CreditSanctioned 500.00 _ 500.00
2 Bank of Baroda Cash CreditSanctioned 200.00 _ 200.00
3 Bank of Maharashtra Working Capital Demand LoanSanctioned 20.00 _ 20.00
4 Bank of Maharashtra Cash CreditSanctioned 200.00 _ 200.00
5 Bank of Maharashtra Funded Interest Term LoanSanctioned 0.16 _ 0.16
6 Bank of Maharashtra Funded Interest Term LoanSanctioned 5.05 _ 5.05
7 Canara Bank Working Capital Demand LoanSanctioned 14.30 _ 14.30
8 Canara Bank Cash CreditSanctioned 200.00 _ 200.00
9 Karur Vysya Bank Term LoanSanctioned 31.54 _ 31.54
10 Karur Vysya Bank Term LoanSanctioned 100.00 _ 100.00
11 Punjab National Bank Cash CreditSanctioned 200.00 _ 200.00
12 Punjab National Bank Working Capital Demand LoanSanctioned 20.00 _ 20.00
13 State Bank Of India (SBI) Letter of CreditSanctioned _ 75.00 75.00
14 State Bank Of India (SBI) Term LoanSanctioned 852.47 _ 852.47
15 State Bank Of India (SBI) Bank GuaranteeSanctioned _ 125.00 125.00
16 State Bank Of India (SBI) Cash CreditSanctioned 500.00 _ 500.00
17 State Bank Of India (SBI) Working Capital Demand LoanSanctioned 33.34 _ 33.34
18 State Bank Of India (SBI) Funded Interest Term LoanSanctioned 11.84 _ 11.84
19 Tamilnadu Mercantile Bank Limited Cash CreditSanctioned 100.00 _ 100.00
20 Tamilnadu Mercantile Bank Limited Working Capital Demand LoanProposed 100.00 _ 100.00
21 Union Bank of India Working Capital Demand LoanSanctioned 50.00 _ 50.00
22 Union Bank of India Bank GuaranteeSanctioned _ 100.00 100.00
23 Union Bank of India Cash CreditSanctioned 750.00 _ 750.00
24 United Bank of India Funded Interest Term LoanSanctioned 15.52 _ 15.52
Total 3904.22 300.00 4204.22
TOTAL (Rupees Four Thousand Two Hundred Four Crores and Twenty Two lakhs Only)
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