Detailed Rationale

Crisil Ratings has reaffirmed its 'Crisil AAA/Stable/Crisil A1+' ratings on the existing debt instruments, bank facilities and fixed deposit programme of NTPC Limited (NTPC). Also, Crisil Ratings has partially withdrawn its rating on bonds as well as non-convertible debentures (NCDs) of Rs 6,842.73 crore (see Annexure: details of rating withdrawn). The withdrawal is based on independent confirmation of redemption of these instruments and at the company’s request, in line with the Crisil Ratings withdrawal policy.

 

The ratings factor in the strong operating performance of the company in fiscal 2024 and the first nine months of fiscal 2025. The plant load factor (PLF) for coal-based capacity was strong at 76.20% during the first nine months of fiscal 2025 (76.40% during the corresponding period of fiscal 2024) and is expected to remain healthy over the medium term, driven mainly by robust power demand in the country. Moreover, the coal and gas-based plants reported above normative plant availability factor (PAF) of 89.11% and 93.08%, respectively, for the same period (90.92% and 92.64% PAF, respectively, for the corresponding period in fiscal 2024).

 

The capital expenditure (capex) at the consolidated level has remained strong with ~3.4 gigawatt (GW) of thermal capacity addition in fiscal 2024, and 660 megawatt (MW) during the first nine months of fiscal 2025. The company has planned thermal capacity addition of ~4-5 GW over the next three years. Furthermore, the NTPC group has operational renewable capacity of ~4.3 GW as of February 2024, with an additional ~9 GW in various stages of construction and ~6 GW in the initial bidding stage. Annual capex of Rs 50,000-60,000 crore over the medium term, starting fiscal 2026, is planned to be funded in debt-equity mix of 70:30 in line with the Central Electricity Regulatory Commission’s (CERC’s) guidelines. Annual capex for fiscal 2025 is estimated to be around Rs 35,000 crore. NTPC has an experienced management team which has demonstrated a healthy track record of commissioning of greenfield / brownfield capacity expansion across thermal and renewable segments, which provides comfort. That said, any material delays in implementation of the planned capacity expansion leading to cost overruns, adversely impacting the financial profile, will remain a key monitorable going forward.

 

The ratings continue to reflect the company’s dominant position in the power generation sector in India, strong business and financial risk profiles, and strategic importance to the government of India (GoI). These strengths are partially offset by weak credit risk profiles of customers.

Analytical Approach

Crisil Ratings has combined the business and financial risk profiles of NTPC and its subsidiaries, associate companies and joint ventures, because they have strong operational and financial linkages.

 

The ratings factor in expected support from the GoI on account of its 51.1% stake in the entity as on December 31, 2024. Crisil Ratings believes NTPC will, during exigencies, receive distress support from the government for timely debt servicing, considering its strategic role in meeting a quarter of India’s power generation.

 

Please refer Annexure - List of entities consolidated, which captures the list of entities considered and their analytical treatment of consolidation

Key Rating Drivers & Detailed Description

Strengths:

Dominant position in the domestic power generation sector

NTPC is the largest domestic power generation company, accounting for ~17% of the overall installed capacity as on March 31, 2024 (consolidated capacity stood at ~75.96 GW including 1.32 GW of international capacities), and nearly a quarter of the power generated in fiscal 2024. Consolidated capacity stands at 77.46 GW as on March 24, 2025. The company has been adding capacities through greenfield and brownfield capacity expansions as well as acquisitions such as the recent acquisition of Ayana Renewable Power through a joint venture (JV) of NTPC Green Energy Ltd (NGEL). Moreover, the company has planned capacity addition of 20-30 GW in the three fiscals, with a large portion of it being additions in renewable capacities through NGEL. NTPC plans to reach ~130 GW, including ~60 GW of renewable capacity, by fiscal 2032. The company is expected to retain its dominant position in the power generation sector over the medium term.

 

Strong business risk profile

NTPC’s thermal capacities are fully backed by long-term power purchase agreements (PPAs). The PPAs are based on the classic two-part tariff structure of CERC, which ensures complete recovery of fixed expenses, including debt servicing charges. It also provides fixed return on equity based on achievement of normative PAF mandated by the regulator, which NTPC continues to maintain. In fiscal 2024, the coal and gas-based plants reported 90.52% and 89.62% PAFs, respectively (against 92.60% and 89.62%, respectively, in fiscal 2023), well above their mandated normative levels. The PAF levels remained strong in the nine months through December 2024 and are expected at similar levels over the medium term.

PLFs of coal-based power plants increased to 77.25% in fiscal 2024, from 75.90% in fiscal 2023 driven by increase in power demand. The PLF remained strong at 76.20% in the nine months through December 2024.

 

Healthy financial risk profile

Consolidated gearing improved to 1.45 times as on March 31, 2024, from 1.49 times in fiscal 2023 despite large capacity expansion owing to timely repayment of long-term borrowings. The gearing is expected at a similar level, over the medium term, aided by yearly capacity expansion plan of 6-8 GW with a funding mix of 70:30 (as prescribed by CERC) for its thermal capacity additions and a funding mix of 80:20 for its renewable capacity additions. Liquidity is strong driven by cash accrual of Rs 31,572 crore in fiscal 2024 and the ability to raise funds, while consolidated cash and equivalent was moderate at Rs 4,091 crore as on February 28, 2025.

 

Strategic importance to GoI

NTPC has been accorded the Maharatna status. As part of its divestment plan, GoI has pared its shareholding in NTPC over the past several years. However, the government remains the majority shareholder with 51.1% as on December 31, 2024. It will continue to provide need-based financial support, through guarantees, for foreign currency borrowing. Also, it accounts for nearly a fourth of the power generated in the country.

 

Weakness:

Weak credit risk profiles of customers

The company is exposed to risks related to delay in payments from counterparties, which are mostly state power distribution companies (discoms) that have weak credit risk profiles. Thus, timely collection of receivables is a key monitorable. The company’s collection efficiency has been strong and, hence, receivables (excluding unbilled revenue and bill discounting) were low at less than 40 days in fiscals 2018 and 2019. However, delays in payment from counterparties resulted in increase in receivables to 68 days in fiscal 2020. Receivables reduced to 59 days during fiscal 2021 and further moderated to 45 days as on March 31, 2022, and 40 days as on March 31, 2023, with disbursement of funds to discoms under the Atma Nirbhar package. As on March 31, 2024, receivables remain stable at 42 days.

 

Presence of payment security mechanism such as letters of credit and tripartite agreement between NTPC, state governments and the central government to recover the dues from defaulting state power utilities (SPUs), through the Reserve Bank of India (RBI) devolution to state governments provides comfort.

Liquidity: Superior

Liquidity will remain strong over the medium term, supported by cash accrual of over Rs 30,000 crore, ability to raise funds, and cash and equivalent of Rs 4,091 crore as on February 28, 2024. The bank limit (Rs 3,000 crore on standalone basis) was unutilised as on December 31, 2024. The cash and equivalent, annual cash accrual and ability to raise funds should be adequate to cover yearly debt obligation, equity portion of capex and working capital requirement over the medium term.

 

Environment, social and governance (ESG) profile

Crisil Ratings believes NTPC’s ESG profile supports its already strong credit risk profile.

The power sector has a significant impact on the environment owing to higher emissions, water consumption and waste generation. This is because generation of conventional power involves high dependence on natural resources, mainly coal. The sector has a social impact as its operations affect the local community and involve health hazards. NTPC is focused on mitigating its environmental and social risks.

 

Key ESG highlights

• NTPC has well-defined sustainability goals as per its Brighter Plan 2032 initiative. It has deployed strategies to reduce its carbon footprint and is aiming for 17% reduction in carbon dioxide emissions/units generated by 2032.
• The company aims to reduce sulphur dioxide, nitrogen oxide and particulate matter emissions by 79%, 50% and 61%, respectively, by 2032 over 2012 levels. It is in the process of installing flue gas desulphurisation systems across its entire thermal portfolio over the next three years.
• It also plans to increase renewable capacity to 60 GW by 2032, forming 50% of its total capacity, compared with 9.5% as on March 31, 2024.
• Furthermore, it aims to reduce specific water consumption by 34% by 2032 over the 2012 level. The company is implementing rainwater harvesting systems to meet the target.
• Its loss time injury frequency rate of 0.079 in fiscal 2023, which is lower than peers, represents healthy employee safety and well-being standards. Gender diversity is an improvement area, with 8.15% of its employee being women in fiscal 2023.
• The governance structure is characterised by 31% of its board comprising independent directors. However, there is no split in the chairman and CEO positions. It has a committee at the board level to address investor grievances and put out extensive disclosures.

 

There is growing importance of ESG among investors and lenders. The commitment of NTPC to ESG principles will play a key role in enhancing stakeholder confidence, given a high share of market borrowing in its overall debt and access to both domestic and foreign capital markets.

Outlook: Stable

Crisil Ratings believes NTPC will continue to maintain its dominant position in the domestic power generation sector, underscoring its strategic importance to the GoI. The credit risk profile will remain healthy, supported by efficient operations, regulated tariff structure and comfortable debt protection metrics.

Rating Sensitivity Factors

Downward Factors

• Change in the support philosophy of GoI or its shareholding falling below 50%
• Significant weakening of the operating performance of power plants or large, debt-funded capex / acquisitions weakening the financial risk profile
• Significant delay in recovery of dues from customers impacting the cash flow.

About the Company

NTPC was incorporated in 1975. As on March 31, 2024, the company had installed power generation capacity of 75.958 GW, including capacity owned by subsidiaries and joint ventures. This includes 62,194 MW of coal-based capacity, 6,511 MW of gas-based and 3,725 MW of hydropower, with the balance comprising other renewable energy. The company has been conferred the Maharatna status by GoI, which had 51.1% shareholding as on December 31, 2024.

 

As on December 31, 2024, consolidated total income was Rs 1,38,270 crore and profit after tax (PAT) was Rs 16,056 crore, against Rs 1,30,879 crore and Rs 14,842 crore, respectively, a year earlier.

Key Financial Indicators*

Particulars	Unit	2024	2023
Operating income	Rs crore	1,75,917	1,72,348
PAT	Rs crore	21,221	16,989
PAT margin	%	12.1	9.9
Adjusted debt / adjusted networth	Times	1.45	1.49
Adjusted interest coverage	Times	4.62	4.37

*As per analytical adjustments made by Crisil Ratings

Any other information: Not Applicable