Standard & Poor's Ratings Services said today that it had affirmed its 'BBB-' long-term corporate credit rating on India-based NTPC. The outlook is stable. We also affirmed our 'BBB-' issue rating on the company's senior unsecured notes. NTPC is a government-owned power producer.

''We affirmed the rating to reflect NTPC's predictable cash flow generation supported by a stable regulatory framework and long-term supply contracts with state electric utilities (SEUs),'' said Standard & Poor's credit analyst Mehul Sukkawala. ''We expect the company's high capital expenditure to result in a weakening in its financial ratios. But the ratios will remain adequate for the rating.''

NTPC will continue to appropriately manage counterparty risk with weak SEUs, in our opinion. The company continues to collect 100% payments from customers. We do not expect NTPC to face material challenges in collection because of its strong market position, letters of credit from SEUs to cover monthly billing, and first charge on SEUs receivables.

In our opinion, the likelihood of extraordinary support from the government of India (BBB-/Stable/A-3) to NTPC will remain ''very high.'' Our view is based on NTPC's ''very strong'' link with, and ''very important'' role for, the government.

''The stable outlook on NTPC is consistent with the outlook on the sovereign credit rating, and reflects the company's sensitivity to government intervention,'' said Sukkawala.

We could upgrade NTPC if we raise the sovereign rating to 'BBB' and the company's stand-alone credit profile remains 'bbb-'.

Shares of the company declined Rs 1, or 0.71%, to trade at Rs 139.30. The total volume of shares traded was 44,575 at the BSE (10.50 a.m., Tuesday).