The credit profile of regulated Indian power utilities like NTPC will remain largely unaffected despite cash collection delays amid the coronavirus pandemic. The rating of these entities is due to favourable regulatory frameworks that ensure stable operating profits, according to Fitch Ratings.
“We believe any delays in recovering accrued revenue will be recouped with interest costs, in line with slated regulations,” the rating agency said in a statement..
The assets of NTPC Limited (BBB-/Stable) and the Adani Electricity Mumbai Limited (AEML) obligor group (US dollar bonds: BBB-) are based on a cost-plus tariff framework. This provides regulatory certainty till March 2024 from the central regulator and till March 2025 under the Maharashtra regulator, when the current five-year tariff period ends.
