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Vedanta Power has received an upgrade in the credit rating of its guaranteed long-term bank facilities from CRISIL following the completion of the Vedanta Group's demerger. The improved rating reflects the company's stronger credit profile, healthy liquidity, diversified thermal power assets and strategic importance. CRISIL also highlighted Vedanta Power's stable operating performance, long-term power purchase agreements and secure fuel supply arrangements. The company is also set to expand its generation capacity with the commissioning of an additional 600 MW unit at its Sakti Thermal Plant during the current financial year.
Vedanta Power has received an upgrade in the rating of its guaranteed long-term bank facilities from CRISIL following the completion of the Vedanta Group's demerger. The rating agency cited the company's stronger credit profile, improved financial flexibility and the strategic advantages created by the new corporate structure.
According to the company, CRISIL upgraded Vedanta Power's guaranteed long-term bank facilities to CRISIL AA+ (CE)/Stable from CRISIL AA (CE). At the same time, it reaffirmed the company's standalone long-term rating at CRISIL AA-/Stable and its short-term rating at CRISIL A1+.
The company said the rating revision reflects the benefits arising from the successful demerger of the Vedanta Group, which has created a more focused business structure for its individual entities. It added that the revised structure is expected to provide greater strategic focus and improved financial flexibility across the group's businesses.
CRISIL also took into account Vedanta Power's strengthened credit profile, diversified thermal power portfolio, healthy liquidity position and the company's strategic importance while revising the rating. A CRISIL AA+ (CE) rating indicates that the financial instrument carries a high degree of safety with regard to the timely repayment of principal and interest.
Apart from the company's financial position, the rating agency recognised Vedanta Power's stable operating performance, long-term Power Purchase Agreements (PPAs), secure fuel supply arrangements and continued financial flexibility, all of which support its credit strength.
Vedanta Power currently operates a diversified thermal power portfolio across multiple states. Its assets include the Talwandi Sabo Thermal Plant with a capacity of 1,980 MW in Punjab, the Jharsuguda Thermal Plant with 600 MW capacity in Odisha, Meenakshi Energy Ltd with 1,000 MW capacity in Andhra Pradesh and the Sakti Thermal Plant with 600 MW capacity in Chhattisgarh.
The company is also expanding its generation capacity. An additional 600 MW unit at the Vedanta Power Sakti Thermal Plant is expected to be commissioned during the current financial year, which will further strengthen its overall power generation portfolio.
The rating upgrade comes after the Vedanta Group completed its long-planned demerger, under which its diversified businesses are being separated into independent entities to enable focused growth, improve operational efficiency and provide greater financial flexibility. The restructuring has been closely watched by investors and lenders as a key step in strengthening the group's business structure.
Source PTI
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