Rs 30,000-cr bond opportunity in power transmission: Crisil

The credit risk profile of ISTS projects is strong because of assured cash flows, low operations and maintenance

The boost given to the power transmission sector in the country for the last few years may lead to a refinance opportunity of Rs 30,000 crore through bonds, rating agency Crisil said in a statement on Wednesday.

 

“CRISIL estimates inter-state transmission system (ISTS) projects present a Rs 30,000 crore refinancing opportunity for the bond market over the next 3 years as 14,000 circuit km of under-construction lines come on stream,” the company said in its press statement.

 

The estimated Rs 30,000 crore compares to a lower Rs 5,000 crore worth of bonds raised for operational transmission assets in the last couple of years.

 

“The credit risk profile of operational ISTS projects is strong because of assured cash flows, low operations and maintenance (O&M), and low counterparty risk. This appeals to bond investors, as is evident from bond issuances of Rs 5,000 crore for operational ISTS projects over the past couple of years,” Crisil said in its statement.

 

Nitesh Jain, Director, CRISIL Ratings added, “Given the milieu, CRISIL expects the credit profiles of ISTS projects, once operational, to remain healthy, and present a fairly large, low-risk investment opportunity to bond investors.”