S&P changes NHPC view to negative

S&P said it revised its outlook on NHPC Ltd. to negative from stable.

“NHPC’s financial ratios are likely to remain weak over the next two fiscal years. We forecast the company’s leverage will stay high, with a ratio of funds from operations (FFO) to debt of 14%-15% over the two fiscal years ending March 2022,” S&P said in a press release.

NHPC is entering the peak construction phase for its key under-construction developments, the 2,000-megawatt (MW) capacity Subansiri project and 800 MW capacity Parbati-II project. “We estimate its capital expenditure (capex) will be high at Rs. 36 billion – Rs. 40 billion annually over the next three to four fiscal years, given typically long capitalization periods for hydropower assets, the agency said.

At the same time, the agency affirmed its BBB- long-term issuer credit rating on the company.

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