Shares of KPI Green Energy were locked in lower circuit for the third straight trading day, down 5 per cent at Rs 414.25 on the BSE in Tuesday’s intraday trade. The stock of the power generation company is quoting lower for the eight straight day, falling 28 per cent during the period.
On January 03, 2025, the stock price of KPI Green Energy had turned ex-date for bonus issue in the proportion of 1 equity shares for every 2 existing equity shares held in the company. Currently, the stock is trading at its lowest level since January 31, 2024.
Till 01:43 PM, a combined 3.05 million equity shares have changed hands and there are pending sell orders for around 110,000 shares on the NSE and BSE. In comparison, the BSE Sensex was up 0.27 per cent at 76,532. The stock has corrected 44 per cent from its 52-week high level of Rs 744.37, hit on August 12, 2024.
KPI Green Energy is engaged in solar power generation. It provides solar power, both as an independent power producer (IPP) and as a service provider (EPC contractor), to CPP (captive power plant) customers. The current operational IPP capacity of the company under the third-party open access route is approximately 110 MW, including the recently developed hybrid capacity of around 36.2 MW in the Bhavnagar and Bharuch districts of Gujarat.
Also, there are installed IPP capacities of approx. 25 MW, approx. 21 MW and approx.10 MW under the subsidiaries, KPIGEPL, SDEPL and Kpark, respectively. These plants are also located at Bharuch, Gujarat. At the group level, the current installed IPP capacity stands at approximately166 MW; also, the group had commissioned CPP projects of more than 336 MW as of September 2024. At present, KPI Green has an under-development capacity of approximately 1.2 GW, including the recently awarded utility scale projects.
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On December 2, 2024, KPI Green Energy had announced the receipt of its largest-ever order for setting up of 300 MWAC (405 MWDC) ground mounted solar PV plant, including operations and maintenance (O&M) services on a comprehensive basis for a period of five years, from the state-owned company, Coal India.
The company said the project will be executed on an EPC (engineering, procurement and construction) basis and is slated for completion as per the tender timelines at GIPCL’s Solar Park, Khavda, Gujarat, with O&M for five years for the contract price of Rs 1,311 crore.
Meanwhile, on January 8, 2025, ICRA reaffirmed the company's long-term rating to [ICRA] A positive outlook and the short-term rating to [ICRA] A2+.
The ratings reaffirmation factors in the group’s improved capital structure post the fundraising of Rs 1,000 crore by KPI Green through the qualified institutional placement (QIP) route in August 2024, which was mainly utilised to prepay the entire outstanding debt under KPI Green. Also, the part proceeds from the QIP will be used to meet the equity requirement of the recently awarded utility scale independent power producer (IPP) projects under KPI Green.
Notwithstanding the recent improvement in the capital structure, the ratings are constrained by the expected moderation in the leverage and coverage metrics of the group in the medium term owing to the debt-funded nature of the large pipeline of the under-development utility-scale IPP projects of approximately 1.2-GW (DC), along with an increase in the working capital debt to support the growing captive power plant (CPP) order book. Also, the group remains exposed to the risk of timely execution of the IPP projects without any major cost overruns.
However, these projects have high revenue visibility and low offtake risk owing to the presence/proposed signing of long-term (25 years) PPAs at highly competitive tariffs with Gujarat Urja Vikas Nigam Limited (GUVNL), which is a strong counterparty (rated [ICRA]AA- (Stable)/[ICRA]A1+), the ratings agency said.
The group’s working capital intensity remains elevated due to the high inventory and debtor levels in EPC (CPP) projects. The NWC/OI increased to 46 per cent in FY2024 from 21 per cent in FY2023 and 44 per cent FY2022. The working capital intensity is generally high in September and March due to high sales/billing concentration of the EPC segment during these months, ICRA said.