Jefferies downgrades Tata Power on debt reduction doubts
Rating agency Jefferies has downgraded Tata Power from ‘buy’ to ‘hold’, casting doubt on the country’s largest integrated power company’s ability to reduce its debt of Rs 48,400 crore as it prepares to spend another Rs 6,000 crore in renewable energy and electricity distribution projects.
The agency noted that the Tata Power stock is already under pressure with lower coal prices dampening realisations from its international mines and the lingering uncertainty related to tariff hike at its imported coal-based Mundra power plant.
In the ongoing fiscal, Tata Power has repaid nearly Rs 2,250-crore debt and borrowed another Rs 1,900 crore on capex plans and renewable capacity additions. “Sustenance capex will be an add-on to the above investments over the next 36 months,” Jefferies noted.
