Fitch affirms NTPC

Fitch Ratings said it affirmed India-based NTPC Ltd.'s (formerly National Thermal Power Corp.) BB+ senior unsecured foreign currency rating, which is constrained by the BB+ country ceiling, and BB+ $200 million eurobond issue.

The outlook is stable.

Fitch said that NTPC has a very strong business profile as the largest electricity generator in India and supplies about 27% of all electricity consumed in the country. It has a geographically dispersed plant and customer profile, faces low off-take risks, is subject to a transparent and stable regulatory regime and is operationally very efficient. Its linkages with the Government of India (which owns 89.5% of NTPC) and its size enable it to manage fuel availability and credit risks better than its domestic peers, and its plant utilization rates and coverage ratios are better than global peers, the agency said.

Offsetting these strengths is NTPC's exposure to financially weak state power utilities, fuel availability risks and risks on account of sizable capacity expansion plans, the agency said.

Despite an aggressive capital spending plan, Fitch said the company has strong coverage ratios: its net debt to EBITDA, EBITDA to net interest and total debt to total capital ratios were 1.0x, 41.4x and 28.2%, respectively, for the nine months ended December.

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