Rating agency Fitch has affirmed Power Grid Corporation of India Ltd’s (POWERGRID) long-term foreign- and local-currency Issuer Default Ratings (IDRs) at ‘BBB-‘. The outlook is ‘negative’.
The ratings are constrained by the credit profile of the India sovereign (BBB-/negative), which owns 51.34 per cent of the company, under Fitch’s Government Related Entities Rating Criteria.
However, Powergrid’s Standalone Credit Profile (SCP) of ‘bbb+’ benefits from the regulatory nature of more than 90 per cent of its revenue, supported by a stable regulatory regime. The current five-year regulatory tariff period ends in March 2024 which provides certainty of cash flows. Also, it has a dominant market position in the Indian power transmission sector and strong financial profile.
