Tata Power India’s largest integrated private power utility today announced that ICRA has assigned it LAA rating with Positive outlook for the Non-Convertible Debenture (NCD) programme.
ICRA has assigned an LAA (pronounced L double A) rating for the proposed Rs. 6.0 billion NCD Programme of the Company. This rating indicates the high-credit-quality rating assigned by ICRA. The rated instrument carries low credit risk. The outlook on the rating is positive. ICRA has an outstanding rating of LAA (positive outlook) on various NCD programmes of the company amounting to Rs. 25 billion and A1+ rating on Rs. 5 billion Short Term Debt Programme.
The rating reflects the Company’s stable cash accruals from its operations in the licensee area, considerable progress for execution of the green-field power projects at Mundra (4000 MW) in Gujarat and Maithon (1050 MW) in Jharkhand, and the comfortable financial profile. The company has strong financial flexibility, which is evident from the fund raising of about Rs. 30 billion during FY 2010, the demonstrated ability to monetise the stakes in telecom companies in the past periods as well as the recently announced stake sale in coal SPVs for about 300 million USD.
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 however continue to be constrained by the execution risks present in the on-going green-field projects, exposure to interest rate and foreign exchange risks especially in case of competitively bid projects and large size of the investments plans. While the debt levels on consolidated basis are expected to increase from the current level on account of on-going projects of the Group, the ‘non-recourse’ nature of most of the debt on the books of subsidiaries, long maturity of the existing debt on own books and the company’s established track record across the value chain in the power sector provide comfort from the credit perspective.
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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