PTI reported that two rating agencies Standard & Poor's and Fitch have assigned negative outlook to state owned transmission utility Power Grid Corporation in line with the sovereign credit rating outlook of the country.
S&P said that “The negative outlook on Power Grid is consistent with the sovereign credit rating outlook and reflects Power Grid's sensitivity to government intervention.”
Fitch Ratings said that the government, which has control over the management and the appointment of the board, can influence PGCIL's financial and operating decisions.
It said that PGCIL is rated a notch below its standalone credit profile of BBB due to constraint of the government, its 69.4%, which is on negative outlook.
S&P said that political considerations will continue to influence the ability and willingness of state owned electricity boards the company's key customers to increase tariffs, limiting the improvement in their weak credit profiles.
S&P assigned BBB long term corporate credit rating to Power Grid Corporation of India Ltd with a negative outlook. It has also assigned BBB to its proposed issue of up to USD 1 billion unsecured long dated notes.
