Rating Rationale

Brickwork Ratings assigns the long-term ratings at BWR BB /Stable for the bank loan facilities aggregating to Rs.100.47 Crs of RVG Green Energy Pvt. Ltd.

The rating derives strength from the promoters' extensive business experience, long-term revenue visibility through 25-year Power Purchase Agreements (PPAs) with UPPCL for the proposed 31.70 MW AC solar power projects at a contracted tariff of Rs.2.99 per unit, and the favourable industry and policy environment for renewable energy. The rating, however, remains constrained by the company's limited operating track record, high leverage arising from the substantially debt-funded project, limited financial flexibility, and uncertainty regarding effective realisation.

The 'Stable' outlook reflects the expectation that the company will maintain its business and financial risk profile over the medium term, supported by long-term PPAs with UPPCL. The outlook may be revised to Positive if the company successfully completes and commissions all the solar power projects within the extended permissible timeline, achieves the projected power generation and CUF, and demonstrates sustained improvement in profitability, cash accruals, and debt-servicing coverage. Timely infusion of the balance promoter contribution and realisation of eligible subsidies would further support an improvement in the credit profile. The outlook may be revised to Negative if the company experiences further delays in project completion or commencement of commercial operations, resulting in lower-than-projected revenue and cash accruals. A funding shortfall, cost overruns, delays in promoter contribution or unsecured loan infusion could increase funding pressure and weaken the capital structure.

For assigning the rating, BWR has relied upon the last 3 years of audited financials till FY25, Provisional for FY26 and projected financials for FY27 & FY28, and publicly available information and clarification provided by management.

The terms of sanction include standard covenants normally stipulated for such facilities.

• Experienced promoter :

  The company is promoted by Mr. Gagan Deep Singhal, founder of the RVG Group, who has established RVG Green Energy. He has experience through his association with various entities including Zen Renewable Energy Pvt. Ltd., RVG Renewable Energy Pvt. Ltd., RVG Dunamis Pvt. Ltd., Zen Syndications Pvt. Ltd., Highway Entertainments Pvt. Ltd. and Singhal Medicos Pvt. Ltd. He has also been associated with a solar entity, providing relevant exposure to the renewable-energy sector. The promoter group has a diversified presence across businesses including water/amusement parks, multiplexes and medical/nursing education. Other directors, including Mr. Subhash Sharma, Ms. Anjali Sharma and Ms. Muskan Singhal, have experience through their association with various group/other entities. Overall, the promoters' diversified business experience and prior association with renewable energy provide comfort regarding their managerial capability and ability to support the company's operations.

• Long-term revenue visibility :

  The company has entered into 25-year PPAs with UPPCL for the proposed 31.70 MW AC solar power projects, at a contracted tariff of Rs.2.99 per unit. The long-term PPAs provide visibility of offtake and tariff for the operating period, thereby reducing exposure to merchant power price fluctuations and supporting predictability of revenue generation after commissioning.

• Favourable industry and policy environment :

  The company operates in the renewable energy sector, which benefits from continued government focus on increasing renewable energy capacity and reducing dependence on conventional energy sources. The project is being developed under the PM-KUSUM Component C framework, providing policy support to decentralised solar power generation and feeder-level solarisation. Further, increasing electricity demand and the country's renewable energy expansion targets provide a favourable operating environment for solar power projects.

• Limited operating track record :

  The company has a short operating history and is yet to establish a demonstrated track record of stable operations and cash-flow generation.

• High leverage :

  The project is substantially debt-funded, resulting in elevated debt-to-net-worth levels and limited financial flexibility.

• Effective subsidy realisation and Efficient O&M management :

  Timely receipt and application of capital subsidy under Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM) is important to reduce debt burden and strengthen financial metrics.  Structured O&M practices, remote monitoring systems, and rapid fault rectification will minimise downtime and maximise energy yield over the 25-year life. While solar power systems generally have low operational costs, ongoing maintenance, cleaning, and monitoring are necessary to ensure optimal performance.  Any unforeseen maintenance issues can disrupt energy generation and impact revenue.

Going forward, the ability of the company to improve its scale of operations, profitability margins, overall credit risk profile and efficiently manage its working capital requirement would be the key rating sensitivity.

Positive Triggers:

• Timely completion and commissioning of the project within the extended permissible timeline.
• Achievement of projected generation/CUF and profitability, resulting in stronger cash accruals and debt servicing.
• Improvement in financial profile, including successful financial closure, timely promoter contribution and reduction in leverage.

Negative Triggers:

• Further delay in project commissioning, adversely impacting projected cash flows.
• Cost overrun or funding shortfall, leading to higher debt and further weakening of leverage.
• Lower-than-projected generation/CUF or weak debt servicing, resulting in deterioration in the financial risk profile.

The liquidity position is considered adequate, supported by the availability of sanctioned/proposed bank funding, demonstrated promoter contribution towards the project and expected improvement in internal accruals upon commencement of commercial operations. Net cash accruals are projected to increase from Rs.3.07 Cr in FY27 to Rs.10.20 Cr in FY28 against its CPLTD of Rs.6.98, while the current ratio remains comfortable. The long-term PPA with UPPCL provides visibility to operating cash flows after commissioning.

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

Environmental: The company is developing a 31.70 MW AC solar power project, which is based on renewable and clean energy and supports reduction in dependence on conventional fossil-fuel-based power generation. The project is therefore inherently environmentally beneficial.

Social:  The project is expected to contribute to local economic activity through project execution, employment and associated infrastructure development across the project locations.

Governance: The company is promoted by the RVG Group and has a professionally qualified management team. The project has entered into long-term PPAs with UPPCL and has appointed an experienced EPC contractor, E6 Energy. 

RVG Green Energy Private Limited (RVG) was incorporated on 12 February 2024, is a private solar power developer operating from Ferozepur, Punjab, with an existing 2.52 MW solar plant in Rajasthan under the MNRE KUSUM Scheme. The company was established to explore opportunities in the solar power generation segment. RVG has secured contracts under PM-KUSUM Component C / Mukhyamantri Saur Krushi Vahini Yojana 2.0 for development of 31.70 MW AC solar power projects across 11 locations in Uttar Pradesh. The projects are located across Bulandshahr, Muzaffarnagar and Saharanpur districts.

The company has entered into PPAs with Uttar Pradesh Power Corporation Limited (UPPCL) at a fixed tariff of Rs.2.99 per unit for 25 years from commencement of commercial operations.

The Complexity Indicator refers to the ease with which the returns associated with the rated instrument could be estimated. It does not indicate the risk related to the timely payments on the instrument, which is rather indicated by the instrument's credit rating. It also does not indicate the complexity associated with analysing an entity's financial, business, industry risks or complexity related to the structural,transactional or legal aspects. Details on the complexity levels of the instruments are available on BWR's website Complexity Levels.

Not Applicable

BWR Board of Directors have no influence over rating decisions, nor do they sit on the rating committee or review, discuss or evaluate any credit rating during the Board meetings.

Brickwork Ratings (BWR), a Securities and Exchange Board of India [SEBI] registered Credit Rating Agency and accredited by Reserve Bank of India [RBI]. BWR is the 5th agency to get a credit rating registration in India in 2009 and its corporate office in Bengaluru. It has a country-wide presence with representatives in 150+ locations. Canara Bank is an institutional investor in Brickwork.

Brickwork offers credit ratings of Bank Loan, Non- convertible / convertible / partially convertible debentures and other capital market instruments and bonds, Commercial Paper, perpetual bonds, asset-backed and mortgage-backed securities, partial guarantees and other structured / credit enhanced debt instruments, Security Receipts, Securitisation Products, Municipal Bonds, etc. BWR has also rated NGOs, Educational Institutions, Hospitals, Urban Local Bodies and Municipal Corporations.

Nature of Ratings & Information: BWR ratings are opinions on the relative ability of an entity/instrument to meet its financial obligations and are based on information obtained from issuers and other sources believed to be reliable. BWR does not conduct audits, due diligence, or independent verification of such information and does not guarantee its accuracy, adequacy, or completeness.Ratings are current only as of the date of publication and may be revised based on new or unavailable information.

No Advice or Recommendation: Ratings, reports, and related communications are not investment advice and do not constitute recommendations to buy, sell, or hold securities, or to sanction, renew, or disburse credit facilities. They do not represent offers or solicitations for any transaction. Users must rely on their own independent judgment and professional advice. Access to or use of these materials does not create any client relationship with BWR.

Liability, Usage & Regulatory Framework: This content is published for the purpose of dissemination of information as required under applicable laws and regulations. BWR holds exclusive copyright over the content. It may be used with appropriate credit to BWR, provided that the content is not altered or modified in any way that could change its meaning or intent. BWR retains the exclusive right to distribute or share its rating rationales, directly or indirectly, through any print, digital, or electronic media. All reports are provided on an "as is" basis without warranties of any kind, express or implied, including but not limited to merchantability, fitness for a particular purpose, or non-infringement. BWR and its affiliates shall not be liable for any direct, indirect, incidental, or consequential losses or damages arising from the use of these reports. Ratings are subject to continuous surveillance and may be revised, suspended, or withdrawn at any time without notice. These reports are intended for use within India only. BWR operates under SEBI Regulations and Code of Conduct.

For more information on policies and ratings, please visit our www.brickworkratings.com