Strategic asset for Government of India (GoI) with strong operational and financial support
NPCIL is wholly owned by GoI. It is the public sector undertaking which is engaged in design, construction, commissioning and operation of nuclear power reactors. NPCIL is presently operating 24 commercial nuclear power reactors with an installed capacity of 8180 MW. NPCIL is also in the midst of construction and installation of multiple reactors with cumulative capacity of 13800 MW. Out of which  3400 MW capacity is in advance stages of completion and achieving criticality in near to medium term and balance 10400 is at initial stages. NPCIL is a strategic entity for GoI to promote its nuclear energy initiative. GoI provides complete operational support in terms of ensuring continuous supply of fuel and purchase of the power generated by NPCIL.
Given such strategic importance and the complete ownership by the government, NPCIL is considered as a subsovereign entity, thereby enabling it to raise funds at competitive pricing from financial institutions and international lenders. The operational performance of the company has strengthened over the past few years on account of an improvement in plant capacity utilization levels. In FY24, the total gross generation from a total capacity of 8180 MW was 47,971 million units against 45,855 million units generated in FY23. The overall plant load factor (PLF) of NPCIL was ~85 percent in FY24 as against ~87 percent for FY23 and the weighted availability factor was 85 percent in FY24 as against 87 percent in FY24. Kakrapar Gujarat Site (KAPS) for Unit 3 and Unite 4, which are of 700 MW each. commenced operations in FY2024 - KAPS unit 3 was commercialised on 30^th June 2023 and unit 4 was commercialised on 31^st March 2024. Acuité believes that NPCIL’s credit profile will continue to be strongly supported by its strategic importance to GoI. The ownership pattern of NPCIL and the support from Government will remain key rating sensitivities.

Government's focus on the use of cleaner fuel for power generation
The total installed power generation capacity in the country, as on 30 June 2024 stood at 4,46,190 MW. The Coal based energy accounts for 47.28 percent of the total capacity while 43.71 percent is contributed by the Renewable sector. As on 31^st May 2023, the total installed capacity stood at 417688 MW out of which the nuclear energy accounted for around ~1.6 percent of the total installed capacity of the country. The total electricity generation during 2023-24 was 1700 BU as compared to 1624.158 BU generated during 2022-23, representing a growth of about 4.67%. The conventional energy sources are depleting rapidly and leading to environmental pollution and adverse impact on climate. The Government has taken various initiatives to augment capacity addition mainly by non-fossil fuels routes like solar, wind and nuclear to limit CO2 emission in the environment while meeting the demand for power. Nuclear power is clean, safe, reliable and an economically viable source of electricity. The government has taken several initiatives to facilitate expansion of nuclear power in the country by creation of the Indian Nuclear Insurance Pool (INIP) and amendment of the Atomic Energy Act, 1962 to enable Joint Venture companies of Public Sector Enterprises to set up nuclear power plants. The Government had accorded ‘in principle’ approval of sites for setting up nuclear power projects in states of Maharashtra, Haryana, Rajasthan, Madhya Pradesh, Gujarat, West Bengal, Karnataka and Andhra Pradesh. As on date, the committed capacity, including present installed capacity, is 21,980 MW, which is planned to be progressively realized by 2031-32. Acuité believes that the government initiatives for promoting the cleaner source of fuel to bridge the demand supply gap and increase the share of nuclear power in aggregate capacity are expected to augur well for the growth of NPCIL.

Healthy Financial risk profile
The company has healthy financial risk profile marked by healthy net worth, moderate gearing and comfortable debt protection matrices despite its continuing capital expenditure programme. The net worth of the company improved to Rs. 61,516.33 crore in FY24 as against Rs. 54,892.63 crore in FY23. The gearing of the company stood at 1.47 times in FY24 as against 1.40 times in FY23. The debt profile of Rs. 90,679.63 crore in FY24 which mainly consists of long-term debt of Rs. 58,651.59 crore and unsecured loans worth Rs. 32,028.04 crore. The total outside liabilities to tangible net worth (TOL/TNW) stood at 1.60 times in FY24 as against 1.52 times in FY23. The interest coverage ratio stood at 11.75 times in FY24 as against 11.58 times in FY23. The debt service coverage ratio (DSCR) stood at 3.12 times in FY24 as against 2.73 times in FY2023.Acuitebelieves that the financial risk profile will continue to remain healthy on account of strong cash accruals backed by a favourable tariff structure ensuring that there is no sharp rise in the debt levels.

Implementation risk associated with the ongoing projects
NPCIL is in the midst of construction and installation of multiple reactors with cumulative capacity of 13800 MW, out of which 3400 MW capacity is in advance stages of completion and achieving criticality in near to medium term and balance 10400 is at initial stages. Nuclear power projects typically have a long gestation period because the government and the project developer need to ensure very strong safety mechanisms and minimal risks to human life and the environment. Further, acquisition of land for green field projects and addressing public apprehensions about radiation risks also can take up a significant amount of time. However, KAPP-3 & 4 are commissioned in FY2024 and the other 3 projects are expected to achieve criticality in the next 12 – 18 months. While company's extensive experience in developing nuclear power plants somewhat mitigates project implementation risks, Acuite believes that timely completion of its various projects and commencement of operations will continue to be a risk factor.

Counter-party credit risk
The corporation is exposed to counter party credit risk as it has long term power purchase agreements with various state discoms some of which have a weak credit profile. The receivables position of the company stood at Rs. 6214.28 Cr. as on March 31, 2024, out of which 96.82% is receivable from State PSUs and departments. Around 40.90% has been outstanding for more than a year. However, the payments backed by letter of credit arrangement as per Government directives mitigates the risk to an extent. The receivables of the company are expected to improve on account of the Late Payment Surcharge Scheme introduced by the government.