Fitch affirms Power Grid Corporation's 'BBB-' rating, outlook 'negative'

The Fitch ratings on Power Grid Corporation of India Ltd are constrained by the credit profile of the India sovereign (BBB-/negative), which owns 51.34 per cent of the company

Rating agency Fitch has affirmed Power Grid Corporation of India Ltd's (POWERGRID) long-term foreign- and local-currency Issuer Default Ratings (IDRs) at 'BBB-'. The outlook is 'negative'.

The ratings are constrained by the credit profile of the India sovereign (BBB-/negative), which owns 51.34 per cent of the company, under Fitch's Government Related Entities Rating Criteria.

However, Powergrid's Standalone Credit Profile (SCP) of 'bbb+' benefits from the regulatory nature of more than 90 per cent of its revenue, supported by a stable regulatory regime. The current five-year regulatory tariff period ends in March 2024 which provides certainty of cash flows. Also, it