Tata Power drops 2% on Moody’s downgrade
Tata Power Ltd slipped over 2 per cent in early trade on Monday after rating agency Moody’s downgraded Tata Power’s corporate family rating from B1 to Ba3.
By ET Online | Updated:
NEW DELHI: Tata Power Ltd slipped over 2 per cent in early trade on Monday after rating agency Moody’s downgraded Tata Power’s corporate family rating from B1 to Ba3.
At 11:00 am, Tata Power was trading 2 per cent lower at Rs 101.90. It has hit a low of Rs 101.30 and a high of Rs 103.50 so far in trade today.
“The downgrades reflect the deterioration in Tata Power’s credit quality as a result of the impact of weak coal prices on its Indonesian coal mines, as well as the continuing uncertainty related to unresolved bank waivers and the tariff (rate) renegotiations for its Mundra Ultra Mega Power Project,” said Ray Tay, associate vice-president at Moody’s.
Tata Power Company Ltd (TPC) is the largest private-sector power utility in India with an installed generation capacity of 6,099 MW as of September 2012.
TPC’s share of the mine output exceeds Coastal Gujarat Power Ltd (CGPLs) needs, which means the benefit from lower coal prices at CGPL is not enough to offset the lower cashflow from the mines.
TPC’s credit metrics have materially weakened in FY03/2012 and Moody’s believes that the company will breach its downgrade triggers.
At 11:00 am, Tata Power was trading 2 per cent lower at Rs 101.90. It has hit a low of Rs 101.30 and a high of Rs 103.50 so far in trade today.
“The downgrades reflect the deterioration in Tata Power’s credit quality as a result of the impact of weak coal prices on its Indonesian coal mines, as well as the continuing uncertainty related to unresolved bank waivers and the tariff (rate) renegotiations for its Mundra Ultra Mega Power Project,” said Ray Tay, associate vice-president at Moody’s.
Tata Power Company Ltd (TPC) is the largest private-sector power utility in India with an installed generation capacity of 6,099 MW as of September 2012.
TPC’s share of the mine output exceeds Coastal Gujarat Power Ltd (CGPLs) needs, which means the benefit from lower coal prices at CGPL is not enough to offset the lower cashflow from the mines.
TPC’s credit metrics have materially weakened in FY03/2012 and Moody’s believes that the company will breach its downgrade triggers.
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