A large customer relationship can make a growth plan easier to explain. There is a clear counterparty, a substantial proposed commitment and fewer separate negotiations to manage. Those are real advantages. They also change the enterprise's position if assumptions about payment, volume or timing do not hold. The question is not whether a large buyer is inherently undesirable. It is how much of the company's future account becomes dependent on that relationship and whether the approving forum understands the resulting choices. A favourable price can make that second conversation feel unnecessarily hesitant until circumstances change.
The price is not the whole relationship
In our fictional 2024 review, one proposed buyer represented ₹152 crore of projected annual generation receipts in a plan totalling ₹400 crore. The resulting 38% concentration was large enough to matter to the portfolio. We had no allegation that the buyer was insolvent, dishonest or unable to perform. Treating concentration as a concern did not require making such an allegation. It required examining our own exposure. If a change in one relationship would materially alter the enterprise's operating or financial choices, the board should understand that dependency before the contract becomes the main evidence that the growth plan is secured.
Commercial colleagues made a coherent case for the larger commitment. A substantial relationship could support a simpler account, reduce repeated negotiation and give the team a clearer allocation plan. Managing several smaller arrangements has costs of its own. Those costs should not be dismissed merely because diversification sounds prudent. The board needed a comparison of actual proposed paths, including the work and foregone contribution associated with a narrower offer. A statement that concentration is risky is too general to decide a particular commercial question. It has to become an account of what the company would be carrying and what an alternative would require.
Separate allocation, receipts and contribution
We examined a ₹96 crore commitment to that buyer alongside other allocations. In the revised planning case, generation receipts totalled ₹384 crore and the buyer represented 25%. Forecast annual contribution was ₹8 crore lower than under the original proposal. These were different measures. The buyer allocation fell by ₹56 crore, the total receipts forecast fell by ₹16 crore and the contribution estimate fell by ₹8 crore after the relevant operating assumptions. None of those differences was an actual loss of cash already earned. The comparison needed that precision because an impressive subtraction can otherwise become a misleading description of the tradeoff.
I supported the narrower approach, and the board accepted it with conditions and review arrangements developed by the responsible owners. That decision was not a universal concentration limit disguised as a case. Another enterprise, asset mix, commercial structure or set of obligations could justify a different position. Even within our business, a percentage by itself would not settle the quality of the exposure. The useful question was what the relationship meant under the actual proposal and how it compared with the alternatives we could reasonably pursue. The board's decision belonged to that context rather than to an abstract rule that smaller is always safer.
Narrowing one relationship also left other risks in place. The company still depended on its remaining buyers, the energy it could export and the commercial arrangements under which it operated. More relationships could bring additional coordination, uneven payment patterns and different negotiating pressures. We did not buy certainty by giving up forecast contribution. We chose a different distribution of commitments and accepted its cost. I think an executive account should say that plainly. A recommendation becomes easier to trust when it explains what its preferred option does not solve, especially where the unsolved questions remain material to the enterprise.
The eventual FY 2026 generation revenue was ₹334 crore, below both the ₹400 crore original planning case and the ₹384 crore revision. That actual result belongs in the same public account, but it should not be misused as a simple test of the concentration choice. Revenue depended on more than the allocation decision. Our exported generation also fell short of budget, and the operating and commercial circumstances required their own review. I would not claim that the narrower relationship caused the whole difference, nor would I hide the actual year because it made the earlier decision less convenient to present as a success story.
A decision need not be vindicated by a default
There was no invented buyer default that neatly vindicated the recommendation. We did not measure a sum of money saved because a feared event failed to occur. The consequence we can describe is the exposure the board chose to accept, the alternative contribution it relinquished and the contracting work it carried. That may appear less dramatic than a story in which caution prevents a spectacular loss. It is also a more faithful account of many leadership decisions. The decision has to be assessed from the available evidence and the responsibility it created, not from a later event manufactured to make the author look prescient.
For a board discussion, I would want the commercial comparison to show the dependency in terms colleagues can examine. What happens to our choices if the relationship changes? Which obligations continue? What alternatives remain practical, and what do they cost? Those questions should be answered by the relevant commercial, financial and professional owners, with assumptions visible. Directors do not need to renegotiate the contract themselves to ask whether the enterprise account is complete. Equally, executive teams should be able to explain why a larger commitment is appropriate when the evidence supports it, without treating any question about exposure as opposition to growth.
The improvement I would make is earlier timing. A concentration account becomes harder to discuss after the organisation has used a large prospective relationship to reassure itself that the plan is nearly complete. Colleagues have invested effort, and a narrower recommendation can feel like undoing good work. I would bring the portfolio comparison into the first serious review so the commercial opportunity and the dependency develop together in the board's understanding. The purpose is to preserve a set of choices the enterprise can live with. Growth remains the objective, but the size of the offer should not become the only way the organisation recognises progress.