Sterling and Wilson Renewable Energy Credit Rating Reaffirmed At BBB+ With Negative Outlook Amid Financial Pressures

Sterling and Wilson Renewable Energy Limited (SWREL) has received a reaffirmation of its credit ratings from Infomerics Valuation and Rating Limited for its bank facilities amounting to Rs. 6,465.21 crore. The agency has maintained the long-term rating at IVR BBB+ with a Negative outlook, while the short-term rating continues at IVR A2.

The reaffirmed ratings reflect some key strengths in the company’s business performance. SWREL has shown strong revenue growth and holds a healthy order book worth Rs. 9,286.59 crore as of September 30, 2025. The company has also benefited from shifting its focus towards the domestic Indian market, which has helped improve its business prospects. Its association with major clients such as NTPC Green Energy and the Adani Group further adds to its credibility and market position. In addition, SWREL continues to receive strong backing from its promoters, including Reliance New Energy Ltd, which holds a 32.50% stake in the company.

Another important support factor is the indemnity agreement with its promoter selling shareholders. This agreement provides protection against certain legacy-related claims and contingent liabilities, offering a level of financial security to the company.

However, the Negative outlook assigned to the rating highlights ongoing financial challenges. During the first half of the financial year 2026, SWREL reported a net loss. This was mainly due to a one-time exceptional expense of ₹580.10 crore related to legacy issues. As a result, the company’s tangible net worth declined to ₹415.92 crore, and its overall leverage increased. The total debt rose to ₹1,194.30 crore, largely driven by higher working capital requirements to support its expanding operations.

Infomerics has also pointed out that the company’s liquidity position remains stretched. Cash flows are closely aligned with its debt repayment obligations, leaving limited flexibility. Still, SWREL has some buffer in the form of unutilised working capital limits and free cash balances of ₹253.22 crore.

Going ahead, the rating agency will closely track the company’s ability to execute its existing order book efficiently and improve profitability. Any improvement in earnings and capital structure could support a better rating outlook, while higher debt or weaker promoter support may lead to further pressure on ratings.