Credit rating agency, ICRA has reaffirmed the LAAA long-term rating on Rs 600 crore bond programme and Rs 2,125 crore bank facilities of Neyveli Lignite Corporation (NLC). This is the highest credit quality rating assigned by the rating agency. The rated instrument carries the lowest credit risk. The rating agency has also reaffirmed the stable outlook on the long term rating.
The rating reaffirmation continues to reflect the company’s efficient operations vis-a-vis regulatory norms, limited fuel risk arising from its captive lignite mines, cost-plus based tariff mechanism applicable for its power generation plants, favourable demand outlook in view of the power deficit scenario in the southern states and a favourable financial risk profile arising from the conservative capital structure, strong cash generation and robust debt protection metrics.
Neyveli Lignite Corporation (NLC) is engaged in the business of lignite mining and power generation. At present, the company operates three opencast lignite mines of total capacity of 24 million tonnes and three thermal power stations with total installed capacity of 2,490 mega watt.
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