Orient Green Power provides Rs 20.71 crore for REC claim

Orient Green Power Company Limited fully provided Rs 20.71 crore for disputed Renewable Energy Certificate receivables by September 30, 2026, including Rs 4.50 crore booked in the quarter, while management said it remained confident of a favourable Supreme Court appeal. The auditors also highlighted the matter in their limited-review report on the September 2026 consolidated results.

What has Orient Green Power provided for?

Orient Green Power has fully provided Rs 20.71 crore for expected credit losses on receivables linked to a disputed Rs 500 per Renewable Energy Certificate, or REC, difference. The balance relates to receivables outstanding as of March 31, 2017, and the provision was complete as of September 30, 2026. An expected credit loss provision records the risk that a recognised receivable may not be collected.

Orient Green Power made an expected-credit-loss provision of Rs 4.50 crore during the quarter ended September 30, 2026. That quarterly charge formed part of the cumulative Rs 20.71 crore provision recorded through that date. The filing does not separately state the original gross amount of the relevant receivables or disclose cash collections against this particular balance during the half year ended September 30, 2026.

Why is Orient Green Power pursuing the REC amount?

Orient Green Power is pursuing the amount because management considers the claim supportable following a stay granted by the Supreme Court of India on the Central Electricity Regulatory Commission, or CERC, order reducing the floor price. Orient Green Power also said it had obtained legal opinion and was confident of a favourable decision in its appeal against an order of the Appellate Tribunal for Electricity, or APTEL, in New Delhi.

The appeal concerns the Rs 500-per-REC difference, which aggregated to Rs 20.71 crore for the March 31, 2017 receivables. The disclosure therefore sets out two positions: management's confidence in eventual realisation and the accounting decision to fully provide for delayed recovery. It does not provide a date for a Supreme Court hearing, an expected judgment date or a collection timetable if the appeal succeeds.

The Supreme Court stay concerns the CERC floor-price reduction underlying the disputed amount. However, Orient Green Power does not describe the stay as final disposal of its appeal. Management's stated confidence, based on the stay and legal opinion, is not a disclosed court outcome as of September 30, 2026.

How does the provision affect Orient Green Power's reported results?

Orient Green Power reported an overall expected-credit-loss charge on loans, other assets and receivables of Rs 5.92 crore in the half year ended September 30, 2026, compared with Rs 13.76 crore in the half year ended September 30, 2025. The half-year charge declined by Rs 7.84 crore from the previous corresponding period. The filing does not separately quantify every component of the Rs 5.92 crore half-year amount.

By fully providing Rs 20.71 crore, Orient Green Power had recognised an allowance for the entire long-delayed REC balance through September 30, 2026 while continuing the appeal. The filing does not specify the timing or accounting treatment of a potential reversal if the appeal produces a recovery. Any future reversal or cash receipt therefore cannot be inferred from the September 2026 results.

The auditors highlighted the matter as an emphasis of matter in their limited-review report on the consolidated unaudited results. Orient Green Power's Audit Committee reviewed and recommended the results, and its board approved them on November 11, 2026, for the quarter and half year ended September 30, 2026. The statutory auditors carried out a limited review of those results.

What do receivables and cash flows show alongside the REC provision?

Orient Green Power reported total trade receivables of Rs 154.55 crore at September 30, 2026, up from Rs 80.98 crore at March 31, 2026. The Rs 73.57 crore increase was larger than the Rs 20.71 crore REC balance that was fully provided. Orient Green Power does not identify how much of the wider trade-receivables movement related to REC claims, power sales or other customer balances.

In the half-year cash-flow statement, increases in trade receivables used Rs 74.20 crore of operating cash, compared with Rs 85.55 crore used in the half year ended September 30, 2025. Net cash generated from operating activities was Rs 74.45 crore in the 2026 half year, down from Rs 82.64 crore a year earlier. These group-wide cash-flow figures do not identify collections or non-collections of the specific REC claim.

Cash and cash equivalents were Rs 46.45 crore at September 30, 2026, compared with Rs 65.06 crore at March 31, 2026. During the half year, Orient Green Power reported Rs 56.27 crore of net cash used in investing activities and Rs 36.81 crore used in financing activities, partly offset by operating cash generation. Those consolidated movements do not change the Rs 20.71 crore provision or resolve the REC appeal.

What does Orient Green Power's broader renewable-power plan disclose?

Orient Green Power operates in one segment, generation of power through renewable sources, and said its operations are seasonal, meaning quarterly performance may not represent annual performance. In February 2026, Gamma Green Power Private Limited entered into an engineering, procurement and construction contract for three wind turbine generators totalling 9.90 megawatts at an estimated cost of Rs 85.05 crore in Tiruchirappalli district, Tamil Nadu.

Two of Gamma's 3.30-megawatt wind turbine generators were commissioned in the quarter ended March 31, 2026, and the third was commissioned in the quarter ended June 30, 2026. Separately, Beta Wind Farm Private Limited received approval on September 17, 2026 to enter an engineering, procurement and construction contract for two 3.30-megawatt turbines, totalling 6.60 megawatts, at an estimated cost of Rs 62 crore in Karur district, Tamil Nadu.

One of Beta's 6.60-megawatt turbines is expected to be commissioned by December 31, 2026 and the other by January 31, 2027, subject to regulatory approvals. Orient Green Power also disclosed repowering contracts at Clarion Wind Farm Private Limited totalling 7.80 megawatts at Devarkulam, Tamil Nadu, with completion expected by December 31, 2026, subject to regulatory approvals.

Conclusion

Orient Green Power has fully provided Rs 20.71 crore against long-outstanding REC receivables while maintaining its appeal over the Rs 500-per-REC difference. The Rs 4.50 crore provision recorded in the September 2026 quarter completed the allowance disclosed through September 30, 2026, and the auditors highlighted the matter in their limited-review report.

The next disclosed event to watch is the unresolved Supreme Court appeal against the APTEL order, for which Orient Green Power gave no hearing or decision date. Investors can also monitor the planned commissioning of Beta's two 3.30-megawatt turbines by December 31, 2026 and January 31, 2027, subject to regulatory approvals.