ICRA reaffirms highest quality ratings to short & long term debt programmes of Tata Power

Tata Power Company Ltd has announced that ICRA has reaffirmed the 'LAAA' ratings for the Rs 10 billion Long-Term Debenture Programme and the Rs 5 billion Long-Term Debenture Programme of the Company. The rating of LAAA is the highest-credit-quality rating assigned by ICRA, signifying that the rated instrument carries the Lowest credit risk. The rating for the Rs 5 billion Commercial Paper Programme (enhanced from Rs 2 billion) has been retained at A1+, which is the highest- credit-quality rating assigned by ICRA to short-term debt instruments.

According to the ICRA communication, "The rating reflects the stable cash flows from its licensee business characterised by steady demand growth and a favourable cost-plus-rate-of-return regulatory regime, the Company’s strong financial position and reducing vulnerability to competitive pressures in the medium term, given the prevailing energy deficiency in the western region and transmission capacity constraints. The rating continues to factor in the Company’s favourable hydel: thermal mix, its superior operating efficiency, low level of T&D losses and the favourable financial flexibility arising from conservative capitalisation, a large portfolio of liquid investments and its status as a TATA group Company."

Source : Equity Bulls

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