India Ratings & Research (Ind-Ra) has affirmed NHPC long-term issuer rating at 'AAA' with a stable outlook and its short-term issuer rating at 'A1+'.

NHPC operates its hydro plants under the cost-plus regulatory framework outlined by Central Electricity Regulatory Authority (CERC). The regulations are robust and lead to high cash flow predictability as they provide a post-tax return of equity of 15.5%-16.5% along with a reasonable recovery of all costs.

Additionally, NHPC's upcoming plants are also likely to be under the same regulatory framework, reducing business risk. Also, the new CERC framework for FY14-FY19 does not impact hydro power developers negatively.

Shares of the company gained Rs 0.35, or 1.53%, to trade at Rs 26.60 at the BSE (12.25 p.m., Wednesday).