ICRA downgrades NIIF backed Radiance Renewables' long term rating

ICRA lowers long-term rating to A- and outlook to negative citing delayed capacity additions and increased reliance on mezzanine debt by NIIF-backed RRPL

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Rating agency ICRA has downgraded NIIF-backed Radiance Renewables Private Ltd’s (RRPL’s) long-term rating from “A” to “A-” due to moderation in its credit profile and delays in capacity additions.

 

The downgrade factors in the weakening of credit metrics following the use of additional mezzanine debt of Rs 525 crore in July 2025 to fund equity requirements for ongoing projects, and the slower-than-expected progress in capacity additions. The agency also revised the outlook on the ratings from “stable” to “negative”, citing modest credit metrics. It affirmed the short-term rating at “A2+”.

 

RRPL, a renewable energy firm, is a 100 per cent subsidiary of Green Growth Equity Fund (GGEF), which counts the National Infrastructure and Investment Fund (NIIF) and the Government of the United Kingdom among its anchor investors. The company posted a loss of Rs 120.8 crore on operating income of Rs 557.5 crore in FY25. It had reported a loss of Rs 75.3 crore on operating income of Rs 409.1 crore in FY24.

 

ICRA said in a statement that the company availed a mezzanine debt of Rs 525 crore in July 2025, of which Rs 185 crore has been used to repay an earlier mezzanine debt. The remaining amount will fund the equity requirements of upcoming projects in its subsidiaries. Delays in securing incremental equity funding have constrained progress on planned expansion.

 

RRPL had an operational solar power capacity of 610 Megawatt Peak (MWp) as of June 2025, a modest rise from approximately 500 MWp in May 2024, due to delays in land acquisition and fund-raising. Additionally, the company has an under-construction capacity of around 250 MWp and a near-term pipeline of about 256 MWp. This will take the overall installed solar capacity to approximately 1,100 MWp over the next 12–15 months. RRPL aims to scale capacity further to 2,000 MWp by FY28.

 

In this context, ICRA said the ability to raise equity to fund expansion and refinance the mezzanine debt, thereby improving debt coverage metrics, would remain a key rating sensitivity.

 

The reliance on mezzanine debt over equity is expected to moderate the company’s debt coverage indicators at a consolidated level. The Debt Service Coverage Ratio (DSCR) is projected to remain weak in the current financial year (FY26) and modest thereafter, the agency said.

 

The liquidity position of RRPL (standalone) remains adequate, supported by the new mezzanine debt which enabled it to meet equity contributions for projects. The liquidity position is expected to stay adequate, given plans to raise additional equity in FY26 to fund upcoming projects comfortably, it added.