Fitch affirms NTPC at BBB- ; outlook stable

 Fitch Ratings has affirmed NTPC’s long-term foreign and local-currency issuer default ratings at BBB- with a stable outlook.

The agency has also affirmed NTPC’s senior unsecured rating of BBB-, and the BBB- ratings on its $4 billion medium-term note programme. The foreign-currency notes and masala bonds issued under the programme have been affirmed at BBB- and BBB-emr, respectively. NTPC’s ratings benefit from stable operational cash flows due to the favourable regulatory framework.

The company has long-term power purchase agreements (PPAs) for all of its plants, which allow for the pass-through of changes in fixed costs as well as fuel costs. Its revenue and profit are regulated based on invested capital and a rate of return, and incentives under a transparent regulatory cost-plus model.

There is regulatory certainty until March 2019, the end of the current five-year regulatory tariff period, the rating agency said.