Ellume Solar Private Limited Grading Drivers ICRA has assigned a ‘SP 4D’ grading to Ellume Solar Private Limited (ESPL/the company), indicating ‘Weak Performance Capability’ and ‘Weak Financial Strength’ of the channel partner to undertake off-grid solar projects*. The grading is valid for a period of two years from the date of assignment of grading i.e. till March 30, 2017 after which it will be kept under surveillance. Strengths Strong parentage, with flagship company Hi-Fab Engineers Private Limited commanding a reputed brand name in the mechanical engineering sector Promoters proven track record in solar thermal sector , with installations in the range of 2 lakh LPD; experienced technical team is in place for solar initiative Risk Factors Limited track record in solar PV space with installations done on a pilot basis without recording any revenue in the PV domain till date Currently the pending order book consist only of 50kW order for R&D purpose Scaling up of business in PV domain remains the key Order inflow and timely execution remains key for growth of solar venture going forward Loss making operations at present with negative net worth due to limited installations Year of Formation Fact Sheet Office Address * Shareholding Pattern 2010 Shree Building, 4th Floor, Shantilal Modi Road, Kandivali (W) Mumbai 400 067. Mr Rajendra Damania - 50% Mrs. Jyoti Damania – 50% Incorporated in 2010, Ellume Solar Private Limited is currently engaged in the manufacture of solar water heaters and is planning on venturing into the PV segment. The company is already conducting research in the PV segment and has come up with the product profile but is yet to launch them formally. R&D installations has been done for ~36.5 kW consisting of solar pumps and rooftop solar projects. Till date, the company has installed solar water heaters to the extent of 2 lakh LPD. This is for Solar PV SI Related Business – Weak Performance Capability Promoter Track Record: Mr. Rajendra Damania is Chairman & CEO of Ellume Solar private Limited with more than 30 years of experience in engineering and technology. He is also a founder and Managing Director of HI-FAB Engineers Pvt. Ltd with core competency of designing and manufacturing Mechanical Seals. Ellume Solar Private Limited has done PV installations to the extent of ~36.5kW consisting of 2 solar water pump aggregating to 16.5kW and a rooftop solar project of 15kW. The company has an order book of 50kW from its group company Hi-Fab Engineers Private Limited. ICRA notes that the installations conducted by the company are on an R&D basis and not on commercial basis and thus no revenue has been recorded against the same till date. Technical competence and adequacy of manpower: The Chairman and CEO, Mr. Rajendra Damania has an experience of over 30 years in the power domain. The Vice President, Mr Virat Damania has experience of over 10 years and is a post graduate in industrial engineering from State University of New York, Buffalo. The company has also hired experienced personnel as well as trainees. ESPL also has employed a regional sales manager who has over 20 years of experience in the sector and a sales executive who has around 2 years of experience in the industry. The company’s manpower base is adequate given the current scale of operations; however with rise in order book, the company may have to look at hiring additional people or further tie-up with third party associates. Quality of suppliers and tie ups: The firm procures panels primarily from China as well as from India. Solar water heater accessories and glass tubes and ETC panels are procured from Haining Oupairineng Solar Water Heater Company Limited, China and Solar Machines, Tanks, PV panels, PV street lights, PV Pumps, PV back up, and solar accessories are mainly procured from Taian Topsun I& E Ltd, China. And Jiangsu Micoe Solar Energy Company Ltd. Pipes and other accessories are procured from Indian suppliers, namely Panchal Engineering Works and Green Eye Water Tank. Financial Strength – Weak Customer and O&M Network: Ellume Solar Private Limited has not executed any contract in the PV segment yet on a commercial basis. However, ESPL is engaged in the business of solar water heaters for the past 2 years and has a well established distributor and dealer network across Maharashtra and parts of Karnataka. The company is planning on leverage the existing dealer distributor network to market the PV products. The company also has offices across 10 cities in India which will be used for the O&M network. Revenues Rs. 0.006 crore in FY 2014 Return on Capital Employed (RoCE) -53.18% as of FY 2014 Total Outside Liabilities / Tangible Net worth -4.72x Interest Coverage Ratio No interest on debt Net-Worth Net worth of Rs. (0.05) Cr as on March 31, 2014 Current Ratio Relationship with bankers Current ratio of 18.13 times Bankers are satisfied with company’s conduct The overall financial profile of the company is weak, given small scale of operations as well as negative net worth as on March 31, 2014. March 2015 For further details please contact: Analyst Contacts: Mr. Anjan Ghosh (Tel. No. +91-22-3047 0049) [email protected] Relationship Contacts: Mr. L. Shivakumar, (Tel. No. +91-22-2433 1084) [email protected] © Copyright, 2015, ICRA Limited. All Rights Reserved. Contents may be used freely with due acknowledgement to ICRA ICRA gradings should not be treated as recommendation to buy, sell or hold any instrument issued/to be issued by the graded entity. ICRA gradings reflects its current opinion on the graded entity/instrument and may be subject to a process of surveillance, which may lead to revision in gradings. Please visit our website www.icra.in or contact any ICRA office for the latest information on ICRA gradings outstanding. All information contained herein has been obtained by ICRA from sources believed by it to be accurate and reliable, including the graded entity. ICRA however has not conducted any audit of the graded entity or of the information provided by it. 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