Press Release

Jupiter International Limited

March 11, 2022
Ratings
Amount
Facilities/Instruments Rating1 Rating Action
(Rs. crore)
CARE BB (Is); Stable
Issuer Rating^ 0.00 Assigned
[Double B (Issuer Rating); Outlook: Stable]
0.00
Total Instrument
(Rs. Only)
Non Convertible CARE BB; Stable
120.00 Reaffirmed
Debentures (Double B; Outlook: Stable)
120.00
Total Long Term
(Rs. One Hundred Twenty
Instruments
Crore Only)
Details of instruments/facilities in Annexure-1
^The issuer rating is subject to overall gearing not exceeding 2.50 times as on March 31,2022

Detailed Rationale & Key Rating Drivers

The rating assigned for issuer rating and the reaffirmation in rating to the instrument of Jupiter International Limited (JIL)
considers satisfactory financial performance during 9MFY22 (refers to April 01 to December 31, 2021). The rating continues to be
constrained by volatility in raw material and finished goods prices and highly regulated nature of solar industry. However, the
rating weaknesses are partially offset by group’s presence of more than a decade in manufacturing of solar cell coupled with
moderate capital structure and debt protection metrics.

Rating Sensitivities
Positive Factors - Factors that could lead to positive rating action/upgrade:
• Growth in scale of operations as marked by combined total operating income of above Rs.400 crore on a sustained basis.
• Completion of the proposed project within envisaged time and cost.
Negative Factors- Factors that could lead to negative rating action/downgrade:
• Decline in combined total operating income below Rs.300cr or PBILDT margin below 10% on a sustained basis.
• Deterioration in capital structure marked by overall gearing above 2.50x on a sustained basis.

Detailed description of the key rating drivers

Key Rating Weaknesses
Volatility in raw material prices and finished goods
Silicon wafer is the primary raw material for manufacturing SPV cells which is imported from China. Since raw material prices are
volatile in nature, the profitability margin of the company is susceptible to input price fluctuation. The company sources the
material at spot rates. So, the company is exposed to forex fluctuation risk as it makes the payment in USD. However, there’s a
natural hedge to some extent as the selling prices of cells are quoted in USD.

Highly regulated industry

India imports majority of solar equipment from China, Malaysia, Vietnam, and Thailand. Domestic Content Requirement (DCR)
was instituted in the Jawaharlal Nehru National Solar Mission from the beginning of 2010 in an effort to promote domestically
manufactured solar cells and modules for solar projects in India. However, the same was withdrawn subsequently with
intervention by WTO. Further, in order to promote domestic solar manufacturers, Government of India has launched various
schemes viz. Rooftop Program, Central public sector undertaking scheme (CPSU) and PM Kusum Scheme, which emphasizes on
using domestic manufactured modules and solar cells. Along with these schemes, Product Linked Incentive (PLI) and imposition
of Basic Custom Duty (BCD) augurs well for small sized solar project developers, rooftop power projects and residential customers
who rely largely on domestic solar modules. With the focus of government to encourage domestic cell manufacturers, Jupiter
group is expected to reap benefits out of the scheme & incentives along with the increase in demand for cells.

Project Risk
The group is setting up a new production line of 500 MW mono PERC cell in its existing facility in Baddi, Himachal Pradesh and
decommissioning JSPL’s existing line of 133 MW such that the total installed capacity of the group would be 801 MW. The company
expects to incur total capex cost of ~Rs 140 crore which would be funded partly by Non-Convertible Debentures and Optionally
Convertible Debentures to the tune of Rs 120 crore and remaining through internal accruals. The new production line is expected
to commence operations by August’2022.

Key Rating Strengths

Presence of over a decade of group in solar cell manufacturing business
Jupiter group is an established player in the solar cell manufacturing sector, with an operational track record of over a decade.
The installed capacity of the solar cell manufacturing facility stands at 434 MW. Mr. Alok Garodia (MD), son of Mr. R. K Garodia,

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Complete definition of the ratings assigned are available at www.careedge.in and other CARE Ratings Ltd.’s publications

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 Press Release

with an experience of more than a decade in solar industry is actively involved in the family business and looks after the day to
day affairs of the group. A team of qualified & experienced personnel assist the directors to oversee the business.

Satisfactory financial performance in the last two years

The performance of the group deteriorated in FY19 leading to significant decline in profitability which ultimately led to stretched
liquidity and delays in debt servicing with accounts of the company moving to NPA. This was due to sharp reduction in prices by
the Chinese manufacturers for both solar cells and modules. In FY20, with the government intervention to support the domestic
solar cell manufacturers through various schemes introduced coupled with the impact of safeguard duty, new orders at favorable
prices started pouring in for domestic solar manufacturers. This led to the improvement in financial performance for the company
in FY20 and FY21. PBILDT rose significantly from Rs -19 cr in FY19 to Rs 43 cr in FY20 and Rs 103 cr in FY21 due to the increase
in volumes of solar cells coupled with reduction in raw material cost. This resulted in an increase in PBILDT margins to 32.61%
in FY21 (3.88% in FY18). The group reported a TOI of Rs 317 cr in FY21 vis-à-vis Rs 231 cr in FY19. With improvement in PBILDT
and lower capital charge, GCA improved significantly in FY21. In 9MFY22, the group reported PBILDT of Rs 50.00 crore on TOI
of Rs 254 crore.

Moderate capital structure and debt protection metrics

The group has entered in a One Time Settlement (OTS) with its lenders in FY21. Also, part facilities of lenders were taken over
by Phoenix ARC as an ‘assignment of debt’, which is scheduled to be repaid by Jupiter Solar Power Limited (JSPL) in a deferred
payment schedule ending in Oct ’23. OTS settlement along with repayment of debt reduced the total debt of the group from Rs
283 cr as on March 31, 2020 to Rs 108 cr as on March 31, 2021. This reduction in total debt coupled with increase in networth
of the group led to improvement in leverage ratios in FY21. Interest coverage ratio increased from 4.05x in FY20 to 9.14x in FY21
on account of increase in PBILDT levels.
In order to expand its existing manufacturing facility, the group is setting up a new production line of 500 MW with an estimated
project cost of Rs 140 crore. The company has raised Rs 170 crore by way of issuance of Non-Convertible and Optionally
Convertible Debentures and the proceeds of the same shall be utilized partly for funding of project to the tune of Rs 120 crore
and partly for refinancing of existing term loans, payment of creditors and other working capital purposes. The company has
already repaid its existing term loan of ~Rs 27 crore from Phoenix ARC from these proceeds. With the issuance of debentures,
the overall gearing is expected to deteriorate in the near term, however; the same is expected to improve in the medium term
from the incremental cash flows generated post commercialization of new production line.

Industry Outlook
India has set an ambitious target of achieving 175 GW of installed renewable energy capacity, including 100 GW of solar power
by 2022. The long-term renewable energy capacity target stood at 450 GW by 2030, wherein solar power capacity shall have a
major share. The solar power sector in India is heavily dependent on imported solar cells and modules. India imports 80 to 90%
of solar equipment from China, Malaysia, Vietnam, and Thailand etc. To promote domestic solar cell & module manufacturing in
India and reduce dependence on imports, Ministry of New & Renewable Energy (MNRE) proposed the Basic Customs Duty (BCD)
structure w.e.f. April 01, 2022. Further, Union Cabinet also approved an outlay of ₹4,500 crore under PLI scheme for domestic
manufacturing of ‘High-efficiency Solar PV Modules’. With both the schemes in force, it is expected that the cost of domestic
modules largely at par with imported one going forward.

Liquidity: Adequate
The liquidity position of the company is adequate marked by gross cash accruals of Rs 89.07 crore at the consolidated level. The
average utilization of working capital limits stood at 89% for the last six months ended December 30, 2021. Going forward, the
projected cash accruals of the company are expected to be sufficient to meet the debt repayment obligations of the company.

Analytical approach: Consolidated

CARE has taken Consolidated approach as JIL’s subsidiary viz JSPL is engaged in similar line of business and there is operational
linkage between both the companies. This apart, JIL has also extended corporate guarantee for borrowings of JSPL.

Applicable Criteria
Criteria on assigning Outlook to Credit Ratings
CARE’s Policy on Default Recognition
Criteria for Short Term Instruments
Financial ratios – Non-Financial Sector
Rating Methodology-Manufacturing Companies
Liquidity Analysis of Non-Financial Sector Entities
Consolidation

About the Company

Jupiter International Ltd (JIL) was incorporated in 1978 by its founder-promoter Mr. Raj Kumar Garodia of Kolkata. JIL was
engaged in manufacturing and trading of computer peripherals and related products in the domestic market under the brand
name ‘Frontech’. In FY17 the company discontinued the manufacturing of IT peripherals due to lower demand for products.
However, trading of IT peripherals was continued till FY19. Further, the company had set up a solar cell manufacturing plant of
301 MW at its existing manufacturing facility which commenced operation in January 2017. The promoters have prior experience

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in solar cell manufacturing through its subsidiary Jupiter Solar Power Limited (JSPL). JSPL was set up to foray into manufacturing
of solar photo voltaic cell (SPC) by setting up a unit at Baddi, Himachal Pradesh. The unit has an installed capacity of 133 MW.
Brief Financials (Rs. crore) FY20 (A) FY21 (A) 9MFY22 (UA)
Total operating income 263.18 316.67 254.00
PBILDT 43.32 103.26 50.00
PAT 6.99 52.03 NA
Overall gearing (times) -3.84 1.50 NA
Interest coverage (times) 4.05 9.14 NA
A: Audited, UA: Unaudited, NA: Not Available

Status of non-cooperation with previous CRA: Not Applicable

Any other information: Not Applicable

Rating History for last three years: Please refer Annexure-2

Covenants of rated instrument / facility: Detailed explanation of covenants of the rated instruments/facilities is given in
Annexure-3

Complexity level of various instruments rated for this company: Annexure 4

Annexure-1: Details of Instruments / Facilities

Size of
Rating assigned
Name of the Date of Coupon Maturity the Issue
ISIN along with Rating
Instrument Issuance Rate Date (Rs.
Outlook
crore)
Issuer Rating-Issuer
- - - - 0.00 CARE BB (Is); Stable
Ratings
Debentures-Non March 03, March 31,
INE467C07016 12% 120.00 CARE BB; Stable
Convertible Debentures 2022 2026

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Annexure-2: Rating History of last three years

Current Ratings Rating history
Date(s)
Date(s) & &
Sr. Name of the Amount Date(s) & Date(s) &
Rating(s) Rating(s
No Instrument/Ban Outstandin Ratin Rating(s) Rating(s)
Type assigned )
. k Facilities g (Rs. g assigned in assigned in
in 2021- assigned
crore) 2020-2021 2018-2019
2022 in 2019-
2020
1)CARE D;
1)CARE BB;
ISSUER NOT
Stable 1)CARE D;
COOPERATING
CARE (27-Jan-22) ISSUER NOT
Fund-based - LT- *
1 LT 18.30 BB; COOPERATING -
Cash Credit (07-Mar-19)
Stable 2)CARE BB- *
; Stable (10-Jun-20)
2)CARE D
(06-Aug-21)
(16-Nov-18)
1)CARE D;
ISSUER NOT
1)CARE D;
COOPERATING
1)Withdraw ISSUER NOT
Term Loan-Long *
2 LT - - n COOPERATING -
Term (07-Mar-19)
(06-Aug-21) *
(10-Jun-20)
2)CARE D
(16-Nov-18)
1)CARE D /
CARE D;
1)CARE D / ISSUER NOT
CARE D; COOPERATING
1)Withdraw
Fund-based/Non- ISSUER NOT *
3 LT/ST - - n -
fund-based-LT/ST COOPERATING (07-Mar-19)
(06-Aug-21)
*
(10-Jun-20) 2)CARE D /
CARE D
(16-Nov-18)
1)CARE D;
ISSUER NOT
1)CARE D;
COOPERATING
Non-fund-based - 1)Withdraw ISSUER NOT
*
4 ST-Forward ST - - n COOPERATING -
(07-Mar-19)
Contract (06-Aug-21) *
(10-Jun-20)
2)CARE D
(16-Nov-18)
Debentures-Non CARE 1)CARE BB;
5 Convertible LT 120.00 BB; Stable - - -
Debentures Stable (27-Jan-22)
CARE
Issue
Issuer Rating- BB
6 r 0.00
Issuer Ratings (Is);
rating
Stable

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Annexure-3: Detailed explanation of covenants of the rated instrument / facilities

Name of the Instrument
NCD Issue of Rs 120 crore
I Capacity expansion
II Management control
III Fixed assets
Detailed explanation
Any further capacity expansion undertaken by the Issuer to be under a
separate 100% SPV of the Issuer. No guarantee obligation shall be
undertaken by the Issuer for any debt raised at the SPV level.
Promoters cannot step down from the Board/and or their executive positions
which they hold at the time of investment, except with the approval of the
investors.
The issuer, Guarantor and the security providers shall not sell, lease,
transfer, alienate, deal with, dispose or in any manner deal with any of their
respective assets (including but not limited to the mortgaged properties) or
create any encumbrance thereon whatsoever without prior approval of
investors.

Annexure 4: Complexity level of various instruments rated for this company

Sr. No Name of instrument Complexity level
1 Debentures-Non Convertible Debentures Simple

Annexure 5: Bank Lender Details for this Company

To view the lender wise details of bank facilities please click here

Note on complexity levels of the rated instrument: CARE Ratings Ltd. has classified instruments rated by it on the basis of
complexity. Investors/market intermediaries/regulators or others are welcome to write to care@careedge.in for any clarifications.

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Contact us
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Contact no.: +91-22-6754 3573
Email ID: mradul.mishra@careedge.in

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Contact no.: 033-4018-1623
Email ID: anil.more@careedge.in

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Contact no.: + 91-033- 40181600
Email ID: lalit.sikaria@careedge.in

About CARE Ratings Limited:

Established in 1993, CARE Ratings Ltd. is one of the leading credit rating agencies in India. Registered under the Securities and
Exchange Board of India (SEBI), it has also been acknowledged as an External Credit Assessment Institution (ECAI) by the
Reserve Bank of India (RBI). With an equitable position in the Indian capital market, CARE Ratings Limited provides a wide array
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Disclaimer
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instrument and are not recommendations to sanction, renew, disburse or recall the concerned bank facilities or to buy, sell or
hold any security. These ratings do not convey suitability or price for the investor. The agency does not constitute an audit on
the rated entity. CARE Ratings Limited has based its ratings/outlooks based on information obtained from reliable and credible
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Our ratings do not factor in any rating related trigger clauses as per the terms of the facility/instrument, which may involve
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