India Ratings and Research (Ind-Ra) has affirmed NTPC Limited’s long-term issuer rating at ‘IND AAA’ with a Stable Outlook. The rating action covers the company’s existing non-convertible debentures and commercial paper, and assigns a rating to newly proposed bank loan facilities and NCDs. The affirmation reflects NTPC’s dominant position, strong government linkages, and stable cash flows derived from its regulated cost-plus-ROE business model.
Credit Rating Confirmation by India Ratings
NTPC Limited received a reaffirmation of its long-term issuer rating at ‘IND AAA’ with a Stable Outlook from India Ratings and Research Pvt. Ltd., effective February 16, 2026. This stability is based on the agency’s consolidated view of NTPC and its subsidiaries, reflecting the company’s strong legal, strategic, and operational linkages.
Summary of Key Rating Actions
The rating action summarized several instruments:
- The Issuer Rating was Affirmed at IND AAA/Stable.
- Proposed non-convertible debentures of INR180,000 million were Assigned an IND AAA/Stable rating.
- Existing Non-convertible debentures totaling INR450,010 million were Affirmed at IND AAA/Stable.
- The quantum of Commercial paper was reduced from INR221,000 million to INR76,000 million, affirmed at IND A1+.
- Proposed bank loan facilities of INR60,001 million and existing Bank loan facilities of INR154,9999 million were rated IND AAA/Stable/IND A1+ (Assigned and Affirmed, respectively).
Key Drivers Supporting the Rating
Dominant Business Profile and Operational Efficiency
NTPC maintains a dominant position in the Indian power sector, accounting for 24% of overall generation in FY25. The group’s installed capacity reached 85.6GW by end-December 2025. Operational efficiency, supported by long-term Power Purchase Agreements (PPAs) and robust domestic coal availability (including captive mining output of 45.72 MMT in FY25), ensures competitive generation costs.
Strong Government Linkages
The Government of India (Gol) holds a majority stake of 51.1% as of December 31, 2025, and appoints the Board of Directors. Furthermore, Gol had guaranteed INR39 billion of NTPC’s foreign currency loans in FYE25.
Stable Cash Flow Generation
The regulatory framework, based on a cost-plus regulated equity model, provides stability, ensuring healthy Return on Equity (ROE) and cost recovery. Consolidated EBITDA for 9MFY26 stood at INR443 billion, supported by a growing regulated equity base.
Healthy Operational Performance and Diversification
Coal-based plant Plant Load Factor (PLF) remained healthy at 70.69% in 9MFY26, above the India average. Plant Availability Factor (PAF) was maintained at 89.53%. The company is actively diversifying, aiming for 60GW in renewable energy capacity by 2032, supported by subsidiaries like NTPC Green Energy Ltd (NGEL).
Leverage and Liquidity Assessment
Leverage Remains Manageable
Consolidated net leverage improved to 4.26x in FY25. Ind-Ra expects leverage to remain rangebound between 4.5x–5.5x over the medium term, despite debt-funded capital expenditures, as EBITDA is supported by efficient operations.
Adequate Liquidity Position
On-balance sheet liquidity was adequate, with unencumbered cash balances of INR49.64 billion at end-September 2025. This is supplemented by INR30 billion in sanctioned working capital limits (nil utilization) and strong access to competitive capital markets.
Rating Outlook Stability
The rating outlook is Stable. Potential negative rating triggers would include higher-than-expected capital expenditure resulting in sustained higher net leverage. However, the agency notes that the strategic importance of NTPC to the Gol may act as a mitigating factor.
Source: BSE
