Azure Power ↗

The 14 special purpose vehicles (SPVs) of the Azure Group have formed an RG, where these entities have entered an inter- company co-obligor agreement, under which each entity is jointly and severally liable for servicing the combined debt obligations. The co-obligor agreement is unconditional and irrevocable, valid for the full tenor of the rated debt facilities and characterised by the presence of a T-minus structure and cross-default clause among the 14 entities. Each entity is required to tra

CareEdge Ratings considers presence of long-term PPAs for the entire capacity under the RG pool with a weighted average tariff of ₹6.05 per unit, providing healthy revenue visibility, however, cost-competitiveness remains moderate. Around 36% of the portfolio is tied up with stronger counterparties, such as Solar Energy Corporation of India (SECI), Gujarat Urja Vikas Nigam Limited (GUVNL), and NTPC Limited, and the balance is held by state discoms, such as Southern Power Distribution Company of

The generation profile of the pool remained satisfactory, as reflected by actual generation remaining in line with designed energy estimates, as reflected by PLF of 17.1% (AC) in FY26 compared to FY25 PLF of 17.5%. The lower PLF in FY26 was primarily attributable to lower solar irradiance levels during the year. Generation was also impacted by certain asset -specific operational issues, including inverter outages/failures and DC power cable failure at AUPL and APPPL, which together account for n

The entire solar capacity of 599 MWAC under RG is distributed across 14 SPVs. The asset pool is geographically diversified wi th projects across seven states, including Andhra Pradesh, Bihar, Gujarat, Karnataka, Punjab, Rajasthan, and Telangana. Counterparty credit profile is diversified with exposure to central (~36%) and state (~64%) counterparties. Around 36% portfolio is tied up with stronger counterparties, such as SECI, GUVNL, and NTPC , having low credit risk and an established track reco

The entities under the RG are wholly owned subsidiaries of APIPL, which is a subsidiary of Azure Power Global Limited (APGL). The group develops and operates renewable power capacity and has experience of over 10 years in this segment. APGL’s shareholders include Caisse de dépôt et placement du Québec (CDPQ), which holds 53.4%, followed by Ontario Municipal Employees Retirement System (OMERS), which holds 21.4%, and the balance is owned by multiple financial investors , such as

The RG’s capital structure is leveraged, as reflected in total external debt/EBITDA of ~5.9x at FY26-end. Going forward, per CareEdge Ratings’ base case, the capital structure is expected to remainleveraged, with total debt/ EBITDA expected to remain range bound between 4.5x and 5.5x over the next few years. Consequently, the company remains exposed to interest rate variations, as the debt is linked to floating rates.

The RG is exposed to counterparty-related risks, as ~64% of the portfolio capacity is contracted with state discoms, having weak to moderate credit profiles. Current receivable cycle remains comfortable as payments are being cleared within 60-90 days of raising an invoice for almost off-takers and clearance of past dues. CareEdge Ratings expects the collection cycle to remain rangebound within 60-90 days for regular billing, and significant deterioration will be a key credit monitorable.

As tariffs are single part in nature, the company may report lower revenue if power generation declines due to variation in weather conditions or equipment quality. This would affect its cash flows and ability to service debt.