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Case study 01 · Steel trading to renewable energy

Dream Mart

From a steel trading margin to a generation tariff

Dream Mart traded steel. Thin spreads, heavy working capital, and a result that moved with a commodity price nobody in the business controlled. Eighteen months later it was operating a solar generation asset at taluka level, earning from a tariff instead of a trade.

Starting business
Steel trading
Now
Solar generation
Scale
Taluka level
Transition period
About 18 months

What changed

Before, and after

Before After
Revenue model Spread on trade Tariff on generation
Capital pattern Working capital heavy One-time capital expenditure
Asset base Stock and receivables Owned generating asset
Earnings profile Moves with steel price Contracted and predictable

The starting point

Where the business actually was.

Steel trading is a spread business. You buy a commodity, hold it, and sell it slightly higher. The margin is narrow, the working capital requirement is permanent, and a price movement in the wrong week can erase a quarter of trading profit while the warehouse is still full.

Dream Mart was running that model competently. The problem was not execution, it was structure. Almost all the capital in the business was tied up in stock and receivables, the balance sheet carried no asset of lasting value, and every rupee of profit depended on completing another transaction.

The promoters wanted something different: revenue that arrived whether or not a trade closed that month, and an asset that belonged to the business rather than passing through it.

The decision that mattered

Renewable generation is close to the financial opposite of trading. It consumes capital once and then produces a contracted return for twenty-five years, with almost no working capital requirement. That makes it attractive, and it also makes it unforgiving: every assumption is locked in on the day the project is committed, and there is no second trade to recover from a bad one.

The work

Phase by phase, in order

The order matters more than any individual step. Most of what goes wrong in a project like this is sequencing, not effort.

01 Months 1 to 3

Understanding what could actually be funded

Before discussing solar at all, we read the trading business properly. How much of the working capital was genuinely recoverable, what the receivables were really worth, what the business could contribute from its own resources, and what a lender would realistically advance against it.

  • Three-year financial review of the trading operation
  • Working capital audit: what was recoverable and how quickly
  • Debt capacity assessment against realistic cash flow
  • Promoter contribution the family could commit without strain
02 Months 3 to 6

Feasibility, and the route to market

A solar project is a financial instrument wearing engineering clothes. The panels matter far less than where the power goes and at what price. We compared every route available before any equipment was discussed.

  • Site evaluation: land, access, shading and title
  • Generation estimate stress-tested independently of vendor claims
  • Evacuation feasibility and distance to the nearest substation
  • Captive, open access, net metering and DISCOM sale compared over the full term
  • State renewable policy and registration framework reviewed
  • Subsidy and incentive eligibility mapped before commitment
03 Months 6 to 9

Structuring the money

The financial model decides whether a project survives year seven, not year one. We built it with degradation, operations and maintenance cost, and a downside case where generation underperforms, then structured the debt against the weakest of those scenarios rather than the best.

  • Full project cost and means of finance
  • Twenty-five year model with generation degradation and O&M escalation
  • Debt service coverage tested against a downside generation case
  • Entity and ownership structure decided on tax and risk grounds
  • Detailed project report and CMA data prepared for the lender
  • Sanction supported through the query and clarification stage
04 Months 9 to 15

Approvals and compliance

This is the phase that quietly kills projects. Not because any single approval is difficult, but because they are sequential, each one takes longer than promised, and one missed prerequisite restarts a chain. We managed the sequence rather than the individual applications.

  • Land use conversion and revenue records
  • State nodal agency registration for the renewable project
  • DISCOM connectivity and evacuation approval
  • Electrical inspectorate approval and safety clearance
  • Pollution control board consent
  • Fire and building safety compliance
  • Statutory registrations updated for the changed line of business
  • Wheeling, banking or power purchase documentation as applicable
05 Months 15 to 18

Commissioning, and letting the old business go

The last phase runs two projects at once. One is building and commissioning. The other is winding a trading operation down in the right order, so working capital is released to service term debt rather than trapped in stock nobody is buying any more.

  • EPC vendor evaluation and contract review
  • Commissioning oversight and performance verification
  • Planned wind-down of trading stock and receivables
  • Working capital redirected to term debt servicing
  • Generation and revenue monitoring framework handed over
  • Quarterly review cadence established with the promoters

Approvals and compliance

Everything that had to be in place

Each of these has prerequisites. Applied in the wrong order they do not simply delay a project, they reset parts of it.

  • Land use conversion
  • Nodal agency registration
  • DISCOM connectivity approval
  • Electrical inspectorate clearance
  • Pollution control consent
  • Fire and safety compliance
  • Business activity re-registration
  • Evacuation and wheeling documentation

Orina coordinates and prepares these applications. Where a filing must legally be made or certified by a chartered accountant, company secretary, advocate or licensed professional, that person signs it and we work alongside them.

Where it stands

The result.

The business now earns from a tariff rather than a trade. Revenue no longer depends on completing a transaction every month, and it no longer moves with a steel price the promoters could not influence.

The balance sheet changed character completely. Where capital used to sit in stock and receivables that had to be financed permanently, it now sits in an owned generating asset with a defined life and a contracted return.

The transition took roughly eighteen months from first review to commissioning. That is longer than most owners expect and shorter than most projects of this type actually take, which is almost entirely down to running the approvals as one sequence rather than a series of separate applications.

If you are considering the same

Five things we would tell you first

01

Decide the route before the equipment

Whether power is consumed captively, sold through open access or fed to the DISCOM changes the return more than any choice of panel. Settle it first.

02

Site selection is a subsidy decision

Distance to evacuation, land classification and taluka category all move the economics. By the time land is bought, most of the outcome is fixed.

03

Model the bad year, not the brochure

Vendor generation estimates are optimistic by design. If the debt only services on the vendor case, the structure is wrong.

04

Sequence the approvals

Each clearance has prerequisites. Applied in the wrong order they do not merely delay, they reset.

05

Plan the exit from the old business

A trading operation wound down carelessly leaves capital stuck in stock exactly when term debt starts falling due.

Services involved

What this engagement drew on

04 Government subsidy & policy research Find the schemes you qualify for, work out what they are worth, and get the paperwork right the first time. Read more 03 Project reports, DPR & CMA data Bank-ready project reports, detailed project reports and CMA data, built on real assumptions your banker can check. Read more 01 Business strategy & growth planning A written plan for where the business goes next: which markets, which products, which investments, and in what order. Read more

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