S&P cuts outlook on NTPC, SAIL and NHPC too

Ratings agency Standard and Poor's has revised the outlooks on three Indian corporate government-related entities (GREs) to negative from stable. The companies are NTPC, SAIL and NHPC. However, it has affirmed the 'BBB-' long-term issuer credit ratings on these entities. The change in rating outlook on the GREs reflect the change in outlook for the long-term sovereign credit rating of India, the agency said in a press release.

Earlier on Wednesday, S&P cut the outlook on the long-term sovereign credit rating of India to negative from stable, citing the government's high borrowings, fiscal deficit, slowing growth and external situation as key threats.

"Our ratings on these GREs are highly influenced by the sovereign rating given the entities' sensitivity to government intervention in the event of financial distress. In accordance with our criteria for GREs, we believe there is a "very high" likelihood of extraordinary government support for NTPC, a 'high' likelihood of extraordinary government support for NHPC, and a 'moderate' likelihood of extraordinary government support for SAIL," it said.

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For the entire release, click here.