Detailed rationale

Crisil Ratings has assigned its ‘Crisil AAA/Stable’ rating to the Rs 18,000 crore non-convertible debentures (NCDs) of NTPC Ltd (NTPC). Also, Crisil Ratings has reaffirmed its 'Crisil AAA/Stable/Crisil A1+' ratings on the existing debt instruments, bank facilities and fixed deposit programme. Further, Crisil Ratings has partially withdrawn its ratings on bonds of Rs 440 crore and NCDs of Rs 18,329 crore and commercial paper of Rs 6,000 crore, and NCDs of Rs 4,174.34 crore have been redeemed as per independent confirmation received (see Annexure: details of rating withdrawn). The withdrawal is at the company’s request, independent confirmation of redemption of these instruments and supporting documents provided by NTPC, in line with the Crisil Ratings withdrawal policy.

 

The ratings factor in the strong operating performance of the company in fiscal 2025 and the first six months of fiscal 2026. The plant load factor (PLF) for coal-based capacity was healthy at 70.52% for the first six months of fiscal 2026 and 77.44% for fiscal 2025 (76.20% for fiscal 2024) and is expected to remain healthy over the medium term, driven by continued increase in power demand and limited capacity thermal additions in the country. Moreover, the coal-based plants reported above-normative plant availability factor (PAF) of 88.87% and 89.95%, respectively, for the same period (90.52% for fiscal 2024).

 

The capital expenditure (capex) at the consolidated level has remained strong with ~660 megawatt (MW) of thermal capacity addition in fiscal 2025. The company has planned thermal capacity addition of ~5-7 gigawatt (GW) over the three fiscals through 2026. Furthermore, the NTPC group has operational renewable capacity of ~8.7 GW as of September 2025, with an additional ~14 GW in various stages of construction. Annual capex of Rs 40,000-45,000 crore in fiscal 2026 with an increase to Rs 70,000-80,000 crore for fiscals 2027 and 2028, is planned to be funded in debt-equity mix of 70:30 for thermal capacities in line with the Central Electricity Regulatory Commission’s (CERC’s) guidelines and 80:20 for renewable capacity additions. 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 (JVs), 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 June 30, 2025. 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 - 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, 2025 (consolidated capacity stood at ~79.93 GW including 1.32 GW of international capacities), and nearly a quarter of the power generated in fiscal 2025. Consolidated capacity stands at 83.89 GW as on September 30, 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 JV of NTPC Green Energy Ltd (NGEL). Moreover, the company has planned capacity addition of 25-30 GW in the next three fiscals including fiscal 2026, with a large portion of it being additions in renewable capacities through NGEL. NTPC plans to reach ~149 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 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 2025, the coal- and gas-based plants reported 89.95% and 93.14% PAFs, respectively (against 90.52% and 93.06% in fiscal 2024), well above their mandated normative levels. The PAF levels remained strong in the six months through September 2025 and are expected at similar levels over the medium term.

 

PLFs of coal-based power plants increased to 77.44% in fiscal 2025, from 77.25% in fiscal 2024, driven by healthy power demand. The PLF moderated to 70.52% in the six months through September 2025 owing to a moderation in power demand in the first quarter of fiscal 2026.

 

Healthy financial risk profile

Consolidated gearing improved to 1.31 times as on March 31, 2025, from 1.45 times a year ago, despite large capacity expansion owing to timely repayment of long-term borrowing. Gearing is expected at a similar level over the medium term, aided by the capacity expansion plan over the next three years of 5-7 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 of 18-22 GW over the same period. Liquidity is strong, driven by cash accrual of Rs 34,767 crore in fiscal 2025 and the ability to raise funds, while consolidated cash and equivalent was moderate at Rs 7,951 crore as on September 30, 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 September 30, 2025. 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.

Key rating drivers - Weaknesses

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, with disbursement of funds to discoms under the Atma Nirbhar package. As on March 31, 2025, receivables stood at 36 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 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 7,951 crore as on September 30, 2025. The bank limit (Rs 3,000 crore on standalone basis) was unutilised as on June 30, 2025. 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.

ESG profile

NTPC’s environmental social and governance (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 (FGD) systems across its entire thermal portfolio over the next few year and has so far installed lime and dry sorbent injection-based FGD systems across 32 units with a cumulative capacity of 17,640 MW, with ongoing implementation in 100+ units
• It also plans to increase renewable capacity to 60 GW by 2032, forming 50% of its total capacity, compared to 13.4% as on March 31, 2025
• 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
• Other initiatives include use of biomass co-firing (it is targeting use of up to ~10% agro-residue-based biofuel along with coal) and implementation of carbon capture and utilisation projects, alongside green hydrogen mobility projects in Leh (80 kilogramme [kg]/day) and Greater Noida (260 kg/day)
• It reported better-than-peer gender diversity among employees (~10%) and share of differently abled workforce, in fiscal 2025
• The governance structure is characterised by 38% of its board comprising independent directors. However, there is no split in the chairman and CEO positions. It has an exclusive ESG committee at the board level and has put out extensive disclosures

Outlook Stable

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, 2025, the company had installed power generation capacity of 79.93 GW, including capacity owned by subsidiaries and JVs. This includes 62,854 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 September 30, 2025.

Key Financial Indicators*

Particulars	Unit	2025	2025
Operating income	Rs crore	185,495	1,75,917
PAT	Rs crore	23,830	21,221
PAT margin	%	12.8	12.1
Adjusted debt/adjusted networth	Times	1.31	1.45
Adjusted interest coverage	Times	4.57	4.62

*As per analytical adjustments made by Crisil Ratings

Any other information: Not Applicable