RATING RATIONALE

27Feb2026

Gujarat State Energy Generation Ltd

Brickwork Ratings reaffirms the ratings for the Bank Loan Facilities of Rs. 400.00 Crs. of Gujarat State Energy Generation Limited.

Particulars

Facilities**	Amount (Rs.Crs.)		Tenure	Rating#
Facilities**	Previous	Present	Tenure	Previous (16 Dec 2024)	Present
Fund Based	200.00	200.00	Long Term	BWR A-/Stable Reaffirmation	BWR A - /Stable Reaffirmation
Non Fund Based	200.00	200.00	Short Term	BWR A1 Reaffirmation	BWR A1 Reaffirmation
Grand Total	400.00	400.00	(Rupees Four Hundred 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

RATING ACTION / OUTLOOK

Brickwork Ratings (BWR) has reaffirmed the ratings of Rs. 400.00 Crs. of bank loan facilities of Gujarat State Energy Generation Limited.

The reaffirmation of bank loan ratings of Gujarat State Energy Generation Limited (GSEGL or the company) continues to derive comfort from the ownership of entities owned by the Government of Gujarat (GoG), with a maximum shareholding of 64.50% with Gujarat State Petroleum Corporation Ltd (GSPC) and availability of long-term power purchase agreements (PPAs) with Gujarat Urja Vikas Nigam Ltd (GUVNL) wherein GUVNL has undertaken to service the debt obligations and operations and maintenance (O&M) expenses through fixed-cost reimbursements irrespective of the level of generation. The ratings also draw comfort from the low counterparty risk with GUVNL as a sole off-taker with a demonstrated track record of fixed and variable cost reimbursement as per terms of the PPAs. The ratings also consider the moderate financial risk profile of GSEGL as reflected by nil long-term debt and healthy capital structure.

The ratings are, however, constrained on account of the low plant load factor (PLF) of both gas-based Combined Cycle Power Plants (CCPP) due to a lack of availability of affordable and commercially viable gas leading to low demand for electricity from the off-taker (GUVNL). Both the CCPPs of the company have remained idle in most parts of FY25. BWR understands that the PPA of 156.10 MW CCPP expired on 31 May 2022 and has been in preservation mode since June 2022. The PPA has been extended for another five years with GUVNL w.e.f. 01 Sep 2023 and necessary approvals from the Gujarat Electricity Regulatory Commission (GERC) are awaited. BWR also notes that the plants are currently idle due to a lack of demand from GUVNL.

The outlook has been maintained as Stable as the benefits from the PPA with GUVNL are expected to continue. The outlook may be revised to Positive in case of a sustained improvement in PLF and revenue of the company leading to improvement in the overall business and financial risk profile of the company. The outlook may be revised to Negative in case of any sustained disruption in the operational capabilities of the company and strain in the credit risk profile of GUVNL (the off-taker), thus leading to an increase in counterparty risk.

KEY RATING DRIVERS

Credit Strengths:

Strong Parentage and Low Counterparty Risk :
Gujarat State Energy Generation Ltd is part of the GSPC group of Gujarat with Gujarat State Petroleum Corporation Limited (GPSC), the flagship company of the GSPC group a company of strategic importance to the Government of Gujarat (GoG), holding a stake of 64.50%. Almost 75% of the company’s equity shares as of 31 Dec 2025 are held by companies in which GoG has direct or indirect involvement. GUVNL, the sole off-taker of the power generated by the company is 100% owned by, and is of strategic importance to, GoG. A comfortable credit risk profile of GUVNL minimizes the counterparty credit risk of the company.
Long Term PPA with Gujarat Urja Vikas Nigam Ltd (GUVNL) :
GSEGL entered into a long-term PPA for 351.43 MW CCPP with GUVNL in June 2008 for the purchase of power for 20 years, wherein GSEGL is required to sell the entire power generated from the unit to GUVNL. The original PPA of the 156.10 MW CCPP has been renewed with GUVNL for a further period of five years w.e.f. 01 Sep 2023. For both plants, the term loans have been completely repaid. Also, as per the terms of the PPA,s GUVNL is bound to pay the fixed charges, including interest on working capital and operations & maintenance (O&M) obligations, and variable costs as per power generation.
Moderate Financial Risk Profile :
The company’s financial risk profile is moderate marked by a comfortable gearing of 0.13 time. Debt coverage metrics are immaterial keeping in view of the debt obligations covered in the PPA with GUVNL. The company’s debt level increased from Rs. 62.66 Crs. on 31 Mar 2024 to Rs. 78.64 Crs. on 31 Mar 2025, primarily due to higher outstanding Cash Credit facility and increase in short term intercorporate borrowings. The cash & cash equivalents of the company on 31 Mar 2025 was Rs. 96.59 Crs. (PY: Rs. 71.47 Crs.). Due to realization of receivables outstanding, cash & cash equivalents increased to Rs. 169.56 Crs. on 30 Sep 2025 (Unaudited). The higher plant load factor achieved in FY25, supported by the Government of India’s order dated 12 Apr 2024 under Section 11 of the Electricity Act, 2003, which mandated the availability of power from gas-based stations as per demand from the National Load Dispatch Centre (NLDC) between 01 May 2024 and 30 Jun 2024, resulted in increased revenue in FY25 compared to FY24.

Credit Risks:

Low PLF and Power Generation :
The company’s capacity utilisation depends on the demand from GUVNL, the sole off-taker. The company has to import gas for power generation due to a lack of adequate availability of domestic natural gas for the purpose. Demand for the company’s electricity depends on commercial viability based on the price of natural gas purchased by the company. Due to high global prices of natural gas, the company faced low demand in FY25 which resulted in a low PLF of 7.94% (FY24: 0.99%) for 351.43 MW CCPP and nil (FY24: nil) for 156.10 MW CCPP. Increase in PLF in FY25 was primarily due to the Government of India's (GoI) decision in April 2024 to operationalize the gas-based power plants to cater to the increased power demand in the upcoming summer season. However, the price of natural gas relative to that of coal continues to play a key role in determining demand for gas-based power generation.
Volatility in the revenues :
GSEG’s revenue continues to remain volatile and dependent gas prices. In FY25, revenue of GSEG improved to Rs. 327.08 Crs. (FY24: Rs. 144.04 Crs.) due to improvement in PLF to ~7.94% (~0.99% in FY24) backed by the GoI order dated 12 Apr 2024 for the gas-based power plants. In the future, revenue is expected to remain volatile as it entirely depends on the demand for power generation from GUVNL. However, the debt servicing is expected to stay unaffected on account of the inclusion of a fixed-cost reimbursement mechanism in the PPA irrespective of its revenue.

ANALYTICAL APPROACH - Standalone

The company has no subsidiary as of 31 Mar 2025. BWR has taken a standalone approach for the bank loan rating of the company.

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

RATING SENSITIVITIES

Going forward, timely receipt of reimbursements from GUVNL, the ability of GSEGL to maintain plant availability to cater to the demand from GUVNL based on SLDC/NLDC requirements and the generation of adequate operating profit from power generation will be key monitorable and sensitivities for the company

Upward:

Substantial improvement in PAF and PLF on a sustained basis
Substantial improvement in revenue and profitability on a sustained basis

Downward:

Deterioration in the overall financial risk profile of GSEGL
Weakening of the credit profile of GUVNL leading to delays in reimbursements

LIQUIDITY INDICATORS - Adequate

The company’s cash & cash equivalents were at Rs. 96.59 Crs. on 31 Mar 2025 and Rs. 169.56 Crs. on 30 Sep 2025 (Unaudited). The company has repaid all its long-term debt obligations by Sep’23 with no repayment obligations to date. The company’s liquidity profile is also supported by the mostly undrawn fund-based working capital line of credit of ~Rs.80 Crs. Its short-term unsecured borrowings from related parties are interest-bearing, with internal funds being able to cover the interest cost adequately over the previous three fiscals. The binding terms of the PPA wherein GUVNL has to service the working capital loan interest through fixed cost reimbursement provide further comfort.

ABOUT THE ENTITY

Macro Economic Indicator	Sector	Industry	Basic Industry
Utilities	Power	Power	Power Generation

Gujarat State Energy Generation Limited (GSEGL or the company) was incorporated on 30 Dec 1998 as a special purpose vehicle (SPV) by Gujarat State Petroleum Corporation Limited (GSPC) to generate power in Gujarat by harnessing natural gas. GSEG operates a 156.10 MW gas-based Combined Cycle Power Plant (CCPP) commissioned in 2002 at Hazira in Surat. In March 2012, it commenced the commercial operations of the 351.43 MW gas-based CCPP adjacent to its existing plant at Hazira. The company receives Re-gasified Liquefied Natural Gas (RLNG) through a separate pipeline from Gujarat State Petronet Limited (GSPL). Fuel supply is arranged with the consent of Gujarat Urja Vikas Nigam Ltd (GUVNL) and GSPC as and when required. GSEGL and GUVNL have entered into long-term power purchase agreements (PPAs) under which GSEGL sells the entire generated electricity in bulk to GUVNL. Mr. Milind Torawane is the Chairman of the company.

ESG Profile

The company demonstrates an Adequate ESG profile based on its environmental, social, and governance practices. As a combined cycle power producer, the company’s operations are more fuel-efficient and generate lower emissions per unit of electricity compared to conventional plants. It has instituted measures to control and reduce internal energy consumption, reinforcing its commitment to sustainability. On the social front, the company has a well-defined Corporate Social Responsibility (CSR) Policy and makes periodic disclosures to demonstrate adherence. Related party transactions are conducted strictly at arm’s length in the ordinary course of business, with oversight and approval by the Audit Committee. Financial accountability is ensured through an integrated IT-based system for processing all accounting transactions, strengthening internal financial controls. The company also maintains sound governance structures, with the roles of Chairman and Chief Executive Officer held by separate individuals, and two of the eight members of the Board of Directors serving as Independent Directors.

KEY FINANCIAL INDICATORS (Standalone)

Key Parameters	Units	FY 23 - 24 (Audited)	FY 24 - 25 (Audited)	FY 25 - 26 (Provisional - Midterm-H1)
Operating Revenue	Rs.Crs.	144.04	327.08	240.39
EBITDA	Rs.Crs.	37.53	-3.94	4.94
PAT	Rs.Crs.	-29.66	-18.25	-16.91
Tangible Net Worth	Rs.Crs.	637.58	603.04	588.18
Total Debt / Tangible Net Worth	Times	0.10	0.13	0.16
Current Ratio	Times	1.03	1.07	1.07

KEY COVENANTS OF THE FACILITY RATED

The terms of sanction include standard covenants normally stipulated for such facilities. A key covenant for the rated facilities is:

Escrow account to be maintained with Bank of Baroda, and operations in the account to be permitted as provided in the scheme.

STATUS OF NON-COOPERATION WITH PREVIOUS CRA

Not Applicable

RATING HISTORY FOR THE PREVIOUS 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	200.00	BWR A-/Stable (Reaffirmation)	NA	NA	16Dec2024	BWR A-Stable (Reaffirmation)	09Nov2023	BWR A-Stable (Reaffirmation)
Non Fund Based	ST	200.00	BWR A1 (Reaffirmation)	NA	NA	16Dec2024	BWR A1 (Reaffirmation)	09Nov2023	BWR A1 (Reaffirmation)
Grand Total		400.00	(Rupees Four Hundred Crores Only)

Hyperlink/Reference to applicable Criteria

Analytical Contacts
Swarn Saurabh Assistant Manager - Ratings swarn.s@brickworkratings.com	Niraj Kumar Rathi Senior Director Ratings niraj.r@brickworkratings.com
1-860-425-2742 \| media@brickworkratings.com	Customer Support \| CustSupport@brickwrokratings.com

Gujarat State Energy Generation 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.)	Complexity of the Instrument
1	Bank of Baroda	Cash Credit - Sanctioned	79.67	_	79.67	Simple##
2	Bank of Baroda	Standby LC/ILC/FLC/BG - Sanctioned	_	100.00	100.00	Simple##
3	Un tied portion	Standby LC/ILC/FLC/BG - Proposed	_	100.00	100.00	Simple##
4	Un tied portion	Cash Credit - Proposed	120.33	_	120.33	Simple##
Total			200.00	200.00	400.00
TOTAL (Rupees Four Hundred Crores Only)

## 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.

ANNEXURE-II

INSTRUMENT DETAILS

Instrument	Issue Date	Amount (Rs.Crs)	Coupon Rate (%)	Maturity Date	ISIN Particulars	Complexity of the Instrument
Nil	Nil	Nil	Nil	Nil	Nil	Nil

ANNEXURE-III

List of entities consolidated

Name of Entity	% Ownership	Extent of consolidation	Rationale for consolidation
Nil	Nil	Nil	Nil

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