Fitch affirms NTPC rating at BBB-; outlook stable

Fitch Ratings has today pegged state-run NTPC's long-term foreign and local-currency issuer default ratings (IDRs) at BBB-, which is an investment grade rating.

According to a a Fitch Ratings statement, the outlook is stable. The agency has also affirmed NTPC's senior unsecured rating of BBB-, and the BBB- ratings on its USD 6 billion medium-term note programme and the notes issued under the programme.

NTPC's ratings benefit from its dominant market position in India's power-generation industry and regulated business model, which provides cash flow certainty. The company has managed its counter-party risks well, with 100 per cent collection efficiency for the past 15 years despite the weak financial position of many of its customers, it said.

NTPC's high capex requirements are likely to lead to negative free cash flow over the next few years. Its IDR reflects its current standalone profile of BBB-.

"If its standalone profile weakens, but stays within three notches of the Indian sovereign rating (BBB-/stable), we will rate NTPC using a top-down approach due to the strong likelihood of state support under Fitch's government-related entities rating criteria," it added.