Tata Power India’s largest integrated private power utility today announced that CRISIL has assigned its ‘AA/Positive’ rating to its Rs.6 billion non-convertible debenture programme, while reaffirming ratings on the company’s other existing debentures, short-term debt and bank facilities at ‘AA/Positive/P1+’.
For arriving at its ratings, CRISIL has combined the business and financial risk profiles of Tata Power, its group distribution company North Delhi Power Ltd (NDPL), transmission subsidiaries Powerlinks Transmission Ltd (PTL; rated ‘CCR AA+’ by CRISIL), and Tata Power Trading Company Ltd, and the special-purpose vehicles (SPVs) formed for the execution of Mundra Ultra Mega Power Project (UMPP), namely Coastal Gujarat Power Ltd (CGPL; rated ‘A+/Stable’ by CRISIL), Maithon power project, and Tata Steel Ltd’s (rated ‘AA/FAA+/Stable’ by CRISIL) power projects, as well as the SPVs formed for the acquisition of coal companies in Indonesia.
Mr S. Ramakrishnan, ED-Finance said “The ratings continue to reflect Tata Power’s strong position in the generation and distribution business, a stable licensee business that has regulated returns, and the significant progress made by Tata Power in its two key ongoing projects, the 4000 megawatt (MW) CGPL project, and the 1050 MW Maithon project. The ratings are underpinned by the company’s superior management, stable and healthy accruals, robust liquidity, and continued strong financial flexibility.”
The Mundra UMPP is currently ahead of schedule and is around 53 per cent complete, and the Maithon project was around 82 per cent complete as on March 31, 2010. While Maithon’s first unit is expected to be commissioned by the third quarter of 2010-11 (refers to financial year, April 1 to March 31), the first unit of the Mundra project is expected to be commissioned by the last quarter of 2010-11, reflecting Tata Power’s strong project management skills.
Tata Power has demonstrated its strong financial flexibility through timely financial closure for its two ongoing projects, with long-term loans, and raising funds through global depositary receipts (GDRs), Foreign Currency Convertible Bonds (FCCBs) and sale of long-term investments. Furthermore, Tata Power has recently raised USD300 million in its SPVs engaged in coal mining through selling shares with differential rights to a private equity firm. The funds are expected to be utilised either for securing further long-term coal supplies by investing in coal mines or to reduce outstanding debt in the coal SPVs.
Outlook: Positive
CRISIL believes that Tata Power’s faster-than-expected implementation of the Mundra and Maithon projects is likely to result in cost savings (driven by a reduction in interest expense during the construction period), and consequently, lower-than-expected overall gearing for the projects.
About Tata Power:
Tata Power is India's largest private sector power utility with an installed generation capacity of over 2900 MW and a presence in all the segments of the power sector viz Generation (thermal, hydro, solar and wind), Transmission, Distribution and Trading. The Company has successful public-private partnerships in Generation, Transmission and Distribution - “North Delhi Power Limited” with Delhi Vidyut Board for distribution in North Delhi, ‘Powerlinks Transmission Ltd.’ with Power Grid Corporation of India Ltd. for evacuation of Power from Tala hydro plant in Bhutan to Delhi and ‘Maithon Power Ltd.’ with Damodar Valley Corporation for a 1050 MW Mega Power Project at Jharkhand. It has acquired 30% stake in Coal Companies at Indonesia and is developing the first 4000 MW Ultra Mega Power Project at Mundra (Gujarat) based on super-critical technology. With its track record of technology leadership, customer care and redefining contours of the Indian power sector, Tata Power is poised for a five-fold growth and committed to ‘lighting up lives’ for generations to come.
Disclaimer Statement: Some of the statements in this document, except for the historical information, are forward-looking statements. These forward-looking statements include references to growth projections, plans, strategies, intentions and beliefs concerning our business and operating environment. There are risks, uncertainties and other factors that may cause actual results to differ materially from those projected by these forward-looking statements.
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