Power sector to continue attracting investor interest in 2010: Fitch
29 January 2010
Mumbai: The demand - supply balance fpr power will continue to remain tight in 2010, leading to continued strong investor interest, coupled with policy and institutional support from government of India.
In a just published special report on the Indian power sector, Indian Power Sector Outlook 2010: Riding on Investor Interest, investment rating firm, Fitch Ratings, today said that it its outlook for the Indian power sector for 2010 remains Stable to Negative.
The negative factors for the sector, including difficulties in passing power purchase costs to end-customers, the slow progress of the state power utilities in reducing commercial and technical losses, and delays faced by the power sector companies in implementing an ambitious capex programme, are likely to persist in 2010.
Fitch expects that most ratings will remain stable during 2010 barring those exposed to deterioration in financial leverage arising from execution delays, large capex plans and a build-up of regulatory assets.
The level of capex required in India's power sector is likely to ensure continued investor interest. Both equity and debt investor interest is likely to stay strong during 2010, despite the very large investments seen in 2009.
The public sector 'Mini Ratna' category NHPC Limited (rated 'BBB-'/Stable) raised Rs40 billion through an IPO in 2009. India's largest power company with an installed capacity of 29,894 MW, NTPC Limited ('BBB-'/Stable) and Rural Electrification Corporation Limited ('BBB-'/Stable) are likely to approach equity markets in 2010.