India Ratings and Research (Ind-Ra) has revised its outlook for energy infrastructure companies to negative from stable for FY21 as the COVID-19-driven lockdown is likely to affect liquidity level in all companies across the power sector value chain.
It said power generation companies (gencos) will face an elevated counterparty risk due to steep fall in demand, under-recoveries compared to cost, possible lower subsidy payout by states and weakening economic outlook.
Against the background of gloomy industrial demand and government’s limited resources, liquidity will be a critical driver for energy infrastructure special purpose vehicles (SPVs) until the effects of lockdown persist.
