Fitch rates Indore Municipal BBB(ind)

Fitch Ratings said it assigned a national long-term issuer rating of BBB(ind) to the Indore Municipal Corp.

The outlook is stable.

The rating reflects the company's high dependence on state government transfers, high costs of water distribution, accumulating power dues and potential debt on implementation of the proposed capital investment plan, Fitch said.

The city is expanding rapidly and proposals are being sent to the government to append another 250 sq km of adjoining rural areas to the city. Although the incidence of revenue will increase from this, substantial capital expenditure will have to be invested, which might seriously dent the baseline financials of the company, Fitch said.

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