Singapore, November 08, 2019 -- Moody's Investors Service has taken a number of rating actions on Indian
infrastructure issuers that are linked to the Government of India,
following the change in outlook on India's Baa2 sovereign rating to negative
from stable on 7 November 2019.
Specifically, Moody's has changed the outlook to negative on the
ratings of the companies below and affirmed the companies' ratings:
NTPC Limited (NTPC): Affirmed the Baa2 issuer and foreign currency
senior unsecured ratings, as well as the (P)Baa2 senior unsecured
MTN (foreign) program rating, and revised the ratings outlook to
negative from stable. The baa3 BCA is affirmed.
NHPC Limited (NHPC): Affirmed the Baa2 foreign currency issuer rating
and revised the rating outlook to negative from stable. The baa3
BCA is affirmed.
National Highways Authority of India (NHAI): Affirmed the Baa2 foreign
currency issuer rating and (P)Baa2 senior unsecured MTN (domestic) program
rating, and revised the ratings outlook to negative from stable.
Gail (India) Limited (GAIL): Affirmed the Baa2 local currency and
foreign currency issuer ratings and revised the ratings outlook to negative
from stable. Upgraded the BCA to baa2 from baa3.
Power Grid Corporation of India Limited (Power Grid): Affirmed the
Baa2 foreign currency issuer rating and (P)Baa2 senior unsecured MTN (foreign
and domestic) program rating and revised the ratings outlook to negative
from stable. The baa2 BCA is affirmed.
Adani Green Energy Restricted Group (RG-2) comprising of Wardha
Solar (Maharashtra) Private Limited, Kodangal Solar Park Private
Limited and Adani Renewable Energy (Rj) Limited: Affirmed the (P)Baa3
rating for the backed foreign currency senior secured notes issued by
the three entities in RG-2 and revised the rating outlook to negative
from stable.
Adani Transmission Restricted Group comprising: (1) Raipur-Rajnandgaon-Warora
Transmission Limited (RRWTL), (2) Sipat Transmission Limited (STL),
(3) Chhattisgarh-WR Transmission Limited (CWTL), (4) Hadoti
Power Transmission Service Limited (HDPTSL), (5) Barmer Power Transmission
Service Limited (BPTSL), (6) Thar Power Transmission Service Limited
(TPSL) and (7) Adani Transmission (Rajasthan) Limited (ATRL) (unrated):
Affirmed the (P)Baa2 rating for the backed foreign currency senior secured
notes to be issued by six of the seven entities in the restricted group
except for ATRL, and revised the rating outlook to negative from
stable.
RATINGS RATIONALE
The change in outlook to negative for the ratings of NTPC, NHPC,
NHAI, Power Grid and GAIL follows Moody's change in outlook
for India's sovereign rating to negative from stable.
"We have changed the ratings outlook for NTPC, NHPC and NHAI because
these companies' ratings incorporate our expectation of support
from the Indian government," says Abhishek Tyagi, a
Moody's Vice President and Senior Analyst. "Consequently,
if the sovereign rating is downgraded to Baa3 from Baa2, we will
downgrade the ratings of these companies accordingly."
Moody's has also upgraded the BCA of GAIL to baa2 from baa3,
based on Moody's expectation that the company will maintain strong
financial metrics over the next 2-3 years; a situation which
is more consistent with a baa2 standalone profile. Moody's
points out that over the next 2-3 years, more than 70%
of GAIL's capital expenditure will be concentrated in its core regulated
gas transmission business, which will further improve its cash flow
predictability.
"And, while Power Grid's and GAIL's Baa2 ratings
do not incorporate any uplift based on an assumption of support from the
Indian government, the companies' ratings are constrained
by the sovereign rating, because the vast majority of Power Grid's
and GAIL's operations and revenues are linked to the performance
of the Indian economy," adds Tyagi.
The change in outlook for the backed senior secured notes issued by Adani
Green Energy Restricted Group reflects its dependence on sovereign owned-entities,
such as Solar Energy Corporation of India, for more than 70%
of the offtake from its power projects.
"Meanwhile, the negative outlook on Adani Transmission Restricted
Group's (P)Baa2 rating, reflects the fact that virtually all
of the restricted group's operations are based in India,"
says Spencer Ng, a Moody's Vice President and Senior Analyst.
"As such, a downgrade in the sovereign rating will likely
lead to a downgrade in the restricted group's bond rating."
The principal methodologies used in rating NHPC Limited, NTPC Limited
and Gail (India) Limited were Regulated Electric and Gas Utilities published
in June 2017, and Government-Related Issuers published in
June 2018. The principal methodologies used in rating Power Grid
Corporation of India Limited were Regulated Electric and Gas Networks
published in March 2017, and Government-Related Issuers published
in June 2018. The principal methodology used in rating National
Highways Authority of India was Government-Related Issuers published
in June 2018. The principal methodology used in rating Raipur-Rajnandgaon-Warora
Transmission Limited, Barmer Power Transmission Service Limited,
Chhattisgarh-WR Transmission Limited, Hadoti Power Transmission
Service Limited, Sipat Transmission Limited and Thar Power Transmission
Service Limited was Generic Project Finance published in April 2018.
The principal methodology used in rating Adani Renewable Energy (Rj) Limited,
Wardha Solar (Maharashtra) Private Limited and Kodangal Solar Park Private
Limited was Power Generation Projects published in June 2018. Please
see the Rating Methodologies page on www.moodys.com for
a copy of these methodologies.
NTPC Limited is engaged in the construction and operation of power plants.
It is the largest power-generating company in India, with
a nationwide presence. NTPC's installed generation capacity totaled
57,106 MW at 31 October 2019, including its standalone capacity
comprising coal-based capacity (42,900 MW), gas-based
capacity (4,017 MW), hydro capacity (800 MW), renewables
capacity (928 MW) and joint-venture/subsidiary projects (8,461
MW). NTPC generated INR952 billion of revenue in the fiscal year
ended 31 March 2019. As of 30 September 2019, NTPC was majority
owned (around 54.5%) by the Indian government.
NHPC Limited was established in 1975 and is India's largest hydro power
generation company, with an installed capacity of 7,071 megawatts
(MW) from 22 hydro power stations and 50 MW from wind projects and solar
projects as of the fiscal year ended 31 March 2019. The company
is engaged in the construction of four projects totaling 4,424 MW
of capacity, and is waiting on clearances to start work on another
7,721 MW, while 800 MW of projects are in the pipeline.
At 30 September 2019, NHPC was majority owned (around 73.33%)
by the Indian government.
NHAI is an authority constituted by an Act of Parliament (the NHAI act).
It operates under the Ministry of Road Transport and Highway of the Government
of India, and is responsible for the development, maintenance
and management of the national highways in the country.
Power Grid Corporation of India Limited is an Indian state-owned
electric utility company that was incorporated in 1989. Power Grid
transmits about 45%-50% of the total power generated
in India on its transmission network. It owns and operates around
85% of India's interstate transmission system. Power Grid
is also the central transmission utility of India. At 31 March
2019, Power Grid owned around 158,298 circuit kilometers of
transmission lines and 245 substations, with an aggregate transformation
capacity of 371,912 mega-volt-amperes (MVA).
At 30 September 2019, the Indian government owned 55.37%
of Power Grid.
Established in 1984, Gail (India) Limited is the largest natural
gas transmission company in India, with interests in transmission,
distribution, processing, and upstream and downstream petrochemicals.
GAIL operates over 12,200 km of natural gas pipelines. At
31 March 2019, the average gas transmission for the company totaled
107.43 million metric standard cubic meter per day. Its
network accounts for approximately 70% of the gas transmitted in
India. In addition, it operates around 2,038 km of
liquefied petroleum gas pipelines, five LPG plants with a total
production capacity of 1.4 million tonnes, and a 810,000-tonne
per annum petrochemical facility. At 30 September 2019, the
Indian government owned 52.19% of GAIL.
Adani Green Energy Restricted Group comprises three operating subsidiaries
of Adani Green Energy Limited. The restricted subsidiaries operated
solar power plants with a total capacity of 570 MW as of 30 September
2019.
Adani Transmission Restricted Group comprises seven operating subsidiaries
of Adani Transmission Limited. Collectively, the restricted
subsidiaries operate seven unregulated transmission assets that span over
2,084 circuit kilometers across four states in India.
REGULATORY DISCLOSURES
For ratings issued on a program, series, category/class of
debt or security this announcement provides certain regulatory disclosures
in relation to each rating of a subsequently issued bond or note of the
same series, category/class of debt, security or pursuant
to a program for which the ratings are derived exclusively from existing
ratings in accordance with Moody's rating practices. For ratings
issued on a support provider, this announcement provides certain
regulatory disclosures in relation to the credit rating action on the
support provider and in relation to each particular credit rating action
for securities that derive their credit ratings from the support provider's
credit rating. For provisional ratings, this announcement
provides certain regulatory disclosures in relation to the provisional
rating assigned, and in relation to a definitive rating that may
be assigned subsequent to the final issuance of the debt, in each
case where the transaction structure and terms have not changed prior
to the assignment of the definitive rating in a manner that would have
affected the rating. For further information please see the ratings
tab on the issuer/entity page for the respective issuer on www.moodys.com.
For any affected securities or rated entities receiving direct credit
support from the primary entity(ies) of this credit rating action,
and whose ratings may change as a result of this credit rating action,
the associated regulatory disclosures will be those of the guarantor entity.
Exceptions to this approach exist for the following disclosures,
if applicable to jurisdiction: Ancillary Services, Disclosure
to rated entity, Disclosure from rated entity.
Regulatory disclosures contained in this press release apply to the credit
rating and, if applicable, the related rating outlook or rating
review.
The below contact information is provided for information purposes only.
Please see the ratings tab of the issuer page at www.moodys.com,
for each of the ratings covered, Moody's disclosures on the
lead rating analyst and the Moody's legal entity that has issued
the ratings.
Please see www.moodys.com for any updates on changes to
the lead rating analyst and to the Moody's legal entity that has issued
the rating.
Please see the ratings tab on the issuer/entity page on www.moodys.com
for additional regulatory disclosures for each credit rating.
Abhishek Tyagi
Vice President - Senior Analyst
Project & Infrastructure Finance
Moody's Investors Service Singapore Pte. Ltd.
50 Raffles Place #23-06
Singapore Land Tower
Singapore 48623
Singapore
JOURNALISTS: 852 3758 1350
Client Service: 852 3551 3077
Terry Fanous
MD-Public Proj & Infstr Fin
Project & Infrastructure Finance
JOURNALISTS: 852 3758 1350
Client Service: 852 3551 3077
Releasing Office:
Moody's Investors Service Singapore Pte. Ltd.
50 Raffles Place #23-06
Singapore Land Tower
Singapore 48623
Singapore
JOURNALISTS: 852 3758 1350
Client Service: 852 3551 3077
