ICRA retains A1 rating of KPCL's Rs 100 crore CP programme
New Delhi, Mar 31 (UNI) Rating agency ICRA has retained the A1 rating assigned to the Rs 100 crore Commercial Paper programme of Karnataka Power Corporation Limited (KPCL), indicating highest credit quality in the short term.
The rating primarily reflects the strength arising from its 100 per cent ownership by the Government of Karnataka (GoK) and the strategically important role occupied by KPCL in the state power sector by virtue of its status as the primary power generating company in Karnataka.
The rating also favourably factors in the company's strong cost competitiveness, satisfactory operating efficiency, strong financial flexibility and improved track record of new project execution.
These strengths are tempered by counter-party credit risks arising from its exposure to distribution companies (DISCOMs), many of which are largely dependent on subsidy from GoK, delayed collections from DISCOMs in the recent past and large capex plans which are likely to adversely affect the financial risk profile.
UNI SS MSJ HT1612