Ind-Ra downgrades NTPC BHEL Power Projects to B+ with negative outlook

India Ratings and Research (Ind-Ra) has downgraded NTPC BHEL Power Projects Pvt Ltd's (NBPPL) long-term issuer rating to B-plus from BB-minus with a negative outlook.

NBPPL, an equal joint-venture between NTPC and BHEL, was established to undertake engineering, procurement and construction (EPC) contracts for power plants and other infrastructure projects. The company is also engaged in manufacturing of coal handling plants and ash handling plants at Mannavaram in Andhra Pradesh.

"NBPPL's inability to make timely payments to the operational creditors resulting in disorderly winding down of operations and the reduced support from the parents coupled with further deterioration in the operating performance will be negative for the ratings," said Ind-Ra.

The company's revenue declined to Rs 70 crore in FY19 from Rs 130 crore in FY18, led by the slow project execution and the absence of new orders.

The company has not received any new orders in the EPC segment post-2013 and in the manufacturing operations segment since 2016, which limits the scaling up of operations.

This along with the company's complete dependence on the low-margin project at Unchahar in Uttar Pradesh with an unexecuted order book of Rs 280 crore constrains its ratings.

Ind-Ra said it believes there is a limited likelihood for the company to receive new orders and expects no significant turnaround in operations in the near-to-medium term.

( With inputs from ANI )