New Delhi [India], May 9 (ANI): Fitch Ratings has affirmed stable outlook for three state-owned infrastructure financing companies — REC Limited, Power Finance Corporation Ltd, and Indian Railway Finance Corporation Limited.
For REC Ltd, Fitch said REC is strategically important in implementing power sector reforms to boost India’s economic growth and development, while its provision of financing and refinancing to projects ensures liquidity in the power sector value chain, particularly to weak distribution companies.
Fitch believes REC’s default would most likely disrupt provision of financing and refinancing for projects in the power sector, and might trigger a political crisis.
“Our assessment also considers the company’s material market share of 20 per cent in the power-lending sector,” Fitch said about REC.
REC, under the administrative control of Ministry of Power, is responsible for extending financial support to India’s power sector and has also expanded its business to the logistics and infrastructure sectors. Its borrowers are primarily from government sectors. REC is the nodal agency for the implementation and operation of power sector government schemes.
Similarly, for PFC, Fitch said the company is strategically important to power sector reforms in India, as it provides financing that is essential to prevent liquidity disruptions to the sector, particularly the weak distribution companies.
PFC is majority owned by the Indian government and provides financing to projects and entities in the power sector. It is the nodal agency for activating and managing government programmes in the power sector. PFC has also expanded into the infrastructure and logistics sectors since 2023.
Further, for IRFC, Fitch said that the government has a very strong incentive to provide extraordinary support to IRFC, if needed.
“The affirmation reflects Fitch’s view that IRFC remains an important Indian government-related entity (GRE). We have taken into consideration the company’s strategic role in supporting India’s railway sector and a robust framework for state support. Hence, Fitch believes that the government has a very strong incentive to provide extraordinary support to IRFC, if needed,” Fitch said. (ANI)
Disclaimer: This story is auto-generated from a syndicated feed of ANI; only the image & headline may have been reworked by News Services Division of World News Network Inc Ltd and Palghar News and Pune News and World News
HINDI, MARATHI, GUJARATI, TAMIL, TELUGU, BENGALI, KANNADA, ORIYA, PUNJABI, URDU, MALAYALAM
For more details and packages
