Fitch Ratings has affirmed Power Grid Corporation of India (PGCIL) long-term issuer default Rating (IDR) at 'BBB-'. The outlook is stable. At the same time, the agency has affirmed PGCIL's senior unsecured rating and the ratings on its USD 500 million senior unsecured notes at 'BBB-'.

The rating agency said, "PGCIL's rating benefits from the regulatory nature of its revenue, which has no offtake risks. The latest five-year regulatory tariff period extends to the financial year ending Mar. 31, 2019 (FY19)."

"The revenue is based on return on equity, which has been maintained at 15.5%, and full pass-through of all the fixed costs that are within regulatory norms, including actual interest charges," it said.

The company has no offtake risks as long as it meets the regulatory operational benchmarks - availability of 98% for alternating current systems and 95% for high voltage direct current systems. Power Grid has maintained its availability for both systems at well over 99% over the years; in FY15, it was 99.78%.

Fitch added, "Power Grid's ratings also benefit from its very strong market position. The company owns around 90% of India's interstate and inter-regional electricity transmission network assets. India's transmission network is two-tiered, with the intra-state transmission networks being handled mainly by the state utilities. Overall, PGCIL carried around 46% of the electricity in India in FY15."

Shares of the company gained Rs 0.5, or 0.37%, to trade at Rs 136.45. The total volume of shares traded was 28,315 at the BSE (11.40 a.m., Friday).