VIKRAM SOLAR PRIVATE LIMITED

ICRA has assigned an SP2B grading to Vikram Solar Private Limited (VSPL), which indicates High Performance Capability and Moderate Financial Strength of the channel partner to undertake off-grid solar projects.

Strengths Technology tie-ups with leading global solar photo voltaic cell and module manufacturers which have helped the company manufacture modules of acceptable product quality. Long term working relationship with supplier of solar photo voltaic cells, which is among the leading solar photo voltaic cell manufacturers in the world. Established and diversified client base in Europe and India. Strong growth in sales and operating income in the one and a half year of operation Large order book position from the overseas and domestic clients that indicates technical capabilities and marketing initiatives of VSPL. Availability of fiscal incentives, being located in a Special Economic Zone (SEZ).

Grading Drivers

Risk Factors Adverse capital structure and a high working capital intensity of operations which adversely impacts liquidity. Limited track record of operation of VSPL and the lack of a long experience of the promoters in the business, although the company was able to commission its project ahead of the schedule and stabilise its operations. A large number of players indicating a high level of competition that may lead to pressure on margins going forward.

Grading Rationale While assigning the grading ICRA has taken into consideration VSPLs technology tie ups with leading global solar photo voltaic cell and module manufacturers, the long term working relationship that VSPL enjoys with its solar photo voltaic cell supplier which is also among the leading cell manufacturers in the world, the companys established and diversified client base in both the domestic and the overseas markets, a large order book position indicating the technical capabilities of VSPL and its successful marketing initiatives, the satisfactory operating track record of the companys module so far and the fiscal incentives that the company enjoys being located in a Special Economic Zone. ICRA has also taken note of the relative lack of experience of the promoters of the company in the solar photo voltaic module manufacturing and installation business, however, partially mitigated by the recruitment of professionals with experience in the industry. The overall financial profile of VSPL is characterized by a healthy return on capital employed and strong growth in operating income, which is the result of the execution of large orders secured in 2010 -11 and early commissioning of its second module production line that helped VSPL to quickly ramp up production to higher levels. However, VSPLs adverse capital structure with a gearing at 3.00 time as on 31st March 2010 and its stretched liquidity position attributable to high receivables reflect an unfavourable financial risk profile.

SI Related Business High Performance Capability

Promoter Track Record: Vikram Solar Private Limited is promoted by the Vikram group based in Kolkata. The group has been involved with various engineering units specializing in tea processing, machinery manufacturing and synthetic textile manufacturing. However the promoters experience in the solar energy domain is limited to the operating track record of Vikram Solar Pvt Ltd. During this period the company has installed around 16 MW of solar photo voltaic modules cumulatively in both the domestic and the overseas markets. In addition VSPL has also supplied solar photo voltaic modules to other system integrators through its distributors in Europe and India. VSPLs manufacturing facilities are ISO 9001: 2008 certified by TUV Nord, Germany. The companys products and systems have been accorded quality approvals by various test agencies such as Communaut Europenne (CE) and Underwriters Laboratories (UL).

Technical Competence and Adequacy of Manpower: VSPL has solar photo voltaic module line capacity of 43 MW. At present VSPLs operations are not backward integrated and the company procures solar cells from Taiwan. The companys technical competence is strengthened through its technical collaboration and support provided by M/S Spire Corporation, USA and NPC Inc, Japan. Under the terms of the support provided by these companies, VSPL enjoys R&D, training and product efficiency support from these companies. The company has adequate manpower resources with 130 technical professionals and around 90 non-technical and support staff. To mitigate the risk of having a limited operating track record, VSPL has recruited a number of professionals, experienced in the field of solar power.

Quality of Supplier and Tie-ups: VSPL procures solar photo voltaic cells from Motech Industries Inc of Taiwan. Motech Industries is one of the leading solar cell manufacturers in the world and VSPL enjoys a good working relationship with the company. Customer and O&M Network: VSPL has diversified a client base having installed solar photo voltaic modules in Europe as well as in India for both the public and private sector companies. VSPL has set up offices in Pune, Raipur, Noida and Kolkata to cater to after sales maintenance services thus having an O&M network covering Northern, Central, Western and Eastern India.

Revenues Financial Performance - Moderate

Moderate revenues of Rs 33.52 crore in 2009-10 and Rs 100.15 crore in April-February 2010-11*.

Return on Capital Employed (RoCE)

Healthy ratios of 25.4% in 2009-10 and 17.9% in April-February 2010-11*.

Total Outside Liabilities / Tangible Net Worth

Weak ratios of 3.32 times in 2009-10 and 2.38 times in April-February 2010-11*.

Interest Coverage Ratio

Interest coverage ratio comfortable at 3.01 times during 2009-10 and 2.82 times during AprilFebruary 2010-11*.

Net Worth

Substantial increase in net worth to Rs 36.25 crore as on 28th February 2011* from Rs 17.44 crore as on 31st March 2010 following an equity infusion

and accretion to reserves.

Current Ratio

Increase in current ratio from 1.2 time as on 31st March 2010 to 1.9 time as on 28th February 2011* because of increase in receivables and inventory. Bankers are satisfied with the accounts conduct.

Relationship with bankers * Based on provisional 2010-11 results till February 2011.

March, 2011 For further details please contact: Analyst Contacts: Mr. Jayanta Roy, (Tel. No. +91-33-22876617 / 22800008) jayanta@icraindia.com Relationship Contacts: Ms. Anuradha Ray, (Tel. No. +91-33-22876617 / 22800008) anuradha@icraindia.com Disclaimer: An ICRA SI grade reflects ICRAs opinion on the ability of the graded system integration company to undertake off-grid solar projects. This grading does not constitute an audit by ICRA of the SI. The gradings are based on information provided by the company or obtained by ICRA from sources it considers reliable. ICRA does not guarantee the completeness or accuracy of the information on which the grading is based and therefore shall not be responsible for any liability incurred by the users of such grading. An ICRA SI grading is not a recommendation to use the services of the SI, or to invest in any project undertaken by the SI, or to lend to the SI or invest in any financial instrument issued by the SI. ICRA has the right to revise gradings as and when circumstances so warrant.

Copyright, 2011, ICRA Limited. All Rights Reserved. Contents may be used freely with due acknowledgement to ICRA
ICRA ratings should not be treated as recommendation to buy, sell or hold the rated debt instruments. The ICRA ratings are subject to a process of surveillance which may lead to a revision in ratings. Please visit our website (www.icra.in) or contact any ICRA office for the latest information on ICRA ratings outstanding. All information contained herein has been obtained by ICRA from sources believed by it to be accurate and reliable. Although reasonable care has been taken to ensure that the information herein is true, such information is provided as is without any warranty of any kind, and ICRA in particular, makes no representation or warranty, express or implied, as to the accuracy, timeliness or completeness of any such information. All information contained herein must be construed solely as statements of opinion and ICRA shall not be liable for any losses incurred by users from any use of this publication or its contents

Registered Office ICRA Limited 1105, Kailash Building, 11th Floor, 26, Kasturba Gandhi Marg, New Delhi 110001 Tel: +91-11-23357940-50, Fax: +91-11-23357014 Corporate Office Mr. Vivek Mathur Mobile: 9871221122 Email: vivek@icraindia.com Building No. 8, 2nd Floor, Tower A, DLF Cyber City, Phase II, Gurgaon 122002 Ph: +91-124-4545310 (D), 4545300 / 4545800 (B) Fax; +91-124-4545350 Mumbai Mr. L. Shivakumar Mobile: 91-22-30470005/9821086490 Email: shivakumar@icraindia.com 3rd Floor, Electric Mansion, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025 Ph : +91-22-2433 1046/ 1053/ 1062/ 1074/ 1086/ 1087 Fax : +91-22-2433 1390 Chennai Mr. Jayanta Chatterjee Mobile: 9845022459 Email: jayantac@icraindia.com 5th Floor, Karumuttu Centre, 498 Anna Salai, Nandanam, Chennai-600035. Tel: +91-44-2433 3293/ 94, 2434 0043/ 9659/ 8080, 2433 0724, Fax:91-44-24343663 Ahmedabad Mr. L. Shivakumar Mobile: 9821086490 Email: shivakumar@icraindia.com 907 & 908 Sakar -II, Ellisbridge, Ahmedabad- 380006 Tel: +91-79-26585494, 26582008,26585049, 26584924 TeleFax:+91-79- 2648 4924 Hyderabad Mr. M.S.K. Aditya Mobile: 9963253777 Email: adityamsk@icraindia.com 301, CONCOURSE, 3rd Floor, No. 7-1-58, Ameerpet, Hyderabad 500 016. Tel: +91-40-2373 5061 /7251 Fax: +91-40- 2373 5152 Kolkata Ms. Anuradha Ray Mobile: 91-33-22813158/9831086462 Email: anuradha@icraindia.com A-10 & 11, 3rd Floor, FMC Fortuna, 234/ 3A, A.J.C. Bose Road, Kolkata-700020. Tel: +91-33-2287 6617/ 8839/ 2280 0008 Fax: +91-33-2287 0728 Bangalore Mr. Jayanta Chatterjee Mobile: 9845022459 Email: jayantac@icraindia.com 2 nd Floor. ,Vayudhoot Chambers, Trinity Circle, 15-16 M.G.Road, Bangalore-560001. Tel:91-80-25597401/ 4049 Fax:91-80-25594065 Pune Mr. L. Shivakumar Mobile: 9821086490 Email: shivakumar@icraindia.com 5A, 5th Floor, Symphony, S.No. 210, CTS 3202, Range Hills Road, Shivajinagar,Pune-411 020 Tel : (91 20) 2556 1194 -96; Fax : (91 20) 2556 1231