Sterling & Wilson Renewable Energy’s record is anchored by an indemnity from its former promoters and Reliance New Energy Limited that has absorbed hundreds of crores in claims, and by six consecutive years of unqualified audit opinions since FY2022. That record is now overshadowed by a ₹2,802 crore impairment recognised in FY2026, a charge that wipes out years of carrying values the auditors had flagged as vulnerable, and by a ₹611 crore arbitration loss that fell outside the indemnity and was paid in cash.
Key findings
- A ₹2,802 crore impairment hit in FY2026 after years of nil provisions
Critical- The company recognised an impairment loss of ₹2,802.18 crore on loans, investments and other receivables in group companies during FY2026. Of this, ₹599.70 crore of a loan to subsidiary Sterling and Wilson International Solar FZCO was written off and a further ₹1,690.82 crore provision was made against loans to the same subsidiary, plus ₹244.41 crore against non-current investments. The auditors had flagged in both FY2023 and FY2024 that the net-worth of certain subsidiaries had become negative and that management was relying on projected cash flows to support carrying values. - Multi-jurisdictional litigation with a ₹611 crore loss outside the indemnity
Major- A wholly owned subsidiary incurred an exceptional charge of ₹610.94 crore in FY2025-26 after an arbitral tribunal dismissed its ₹485.64 crore claim against a subcontractor and instead awarded the subcontractor ₹57.85 crore plus interest and legal costs; management confirmed this matter was “non indemnified” and the full amount was paid by the end of Q4 FY26. Two other customers of a WOS filed claims of ₹938.20 crore and ₹856.10 crore and invoked bank guarantees of ₹508.78 crore in aggregate, which the WOS repaid to the banks. Total outstanding corporate guarantees stood at ₹1,658.95 crore as of 31 March 2026, compared with ₹1,528.35 crore a year earlier; surety bonds were ₹Nil, down from ₹106.47 crore. - A layered subsidiary network with dormant entities and unaudited units
Minor- The parent’s standalone PAT of ₹-2,521 crore is 796% worse than the consolidated PAT of ₹-281 crore in the latest year. As of 31 March 2026, the group had 17 subsidiaries and an interest in a partnership firm, down from 24 a year earlier following the dissolution of nine Spanish entities that had nil turnover and nil net worth. For the year ended 31 March 2025, the consolidated financial statements included financial information of 17 subsidiaries which have not been audited, with total assets of ₹8.51 crore, total revenues of nil, and a total net loss after tax of ₹3.25 crore. - Managerial remuneration exceeded statutory limits for three years
Minor- Manager Chandra Kishore Thakur’s remuneration exceeded the limits under Section 197 read with Schedule V by ₹0.69 crore in FY2021-22, ₹1.00 crore in FY2022-23, and ₹4.58 crore in FY2025-26, with each excess requiring a special resolution for shareholder ratification. For FY2025-26, Mr. Thakur was paid ₹5.79 crore against a permissible limit of ₹1.21 crore. Promoter pledge stood at 27.62% of promoter holding as of the latest period, unchanged from one year prior, with 32 fresh pledge events recorded.
What to watch
- Indemnity crystallisation. Claims under the Indemnity Agreement crystallise as of 30 September 2026, the next annual settlement date.
- Excess remuneration vote. Shareholder vote on the special resolution to waive recovery of ₹4.58 crore excess remuneration paid to Mr. Chandra Kishore Thakur for FY2025-26, to be considered at the AGM following the FY2025-26 Annual Report.
- NCLT receivable. Resolution of the ₹92.45 crore disputed receivable from the NCLT-bound customer, with ₹64.10 crore in dishonoured Letters of Credit and ₹61.40 crore deposited with the Court, both classified as assets as at 31 March 2026.
- Coal India order. Conversion of the Coal India L1 award into a signed contract and commencement of execution, as the order is included in unexecuted order value as at March 2026.
Bottom line: This is a record where an indemnity from deep-pocketed promoters has kept the audit opinion clean and absorbed claims for four years running. The risk is that the largest losses are now crystallising outside that indemnity, the ₹2,802 crore impairment and the ₹611 crore arbitration payout, while ₹3,654.75 crore of group-company exposure and ₹1,659 crore of guarantees remain outstanding. Watch the September 2026 indemnity settlement and the Coal India contract conversion for the next turn in the story.