CARE reaffirms Tata Power at AA+ as capacity reaches 16.7 GW with Rs. 20,000 crore annual capex
CARE Ratings has reaffirmed its CARE AA+; Stable rating on The Tata Power Company Limited's Rs. 35 crore long-term bank facilities and Rs. 1,000 crore non-convertible debentures, citing the company's integrated 16.7 GW operational portfolio as on 31 March 2026. The agency identified power purchase agreements covering more than 98% of operating capacity as the principal source of revenue visibility.
Rating context
The reaffirmation is significant because Tata Power operates across generation, transmission and distribution, providing earnings stability through a diversified business structure. According to CARE, the 16.7 GW portfolio comprises 8.8 GW thermal, 6.4 GW renewables, 0.9 GW hydro and 0.4 GW waste-heat capacity, reducing dependence on any single business segment.
The rating also reflects a consolidated debt-to-EBITDA ratio of 3.8x in FY26 despite continuing capital expenditure and refinancing requirements.
Operational performance and expansion plans
During FY26, Tata Power commissioned approximately 968 MW of renewable-energy capacity and maintained a 5.1 GW under-construction renewable pipeline as of 31 March 2026.
A supplementary power purchase agreement with Gujarat Urja Vikas Nigam Limited now covers about 48% of the 4,150 MW Mundra thermal plant, improving fuel-cost recovery visibility.
TP Solar Limited produced 3.8 GW of solar cells and modules during the year, with operating margins improving to 25% from 16% a year earlier.
Management has guided annual capital expenditure of roughly Rs. 20,000 crore over the next three years across renewables, pumped storage, transmission, distribution and manufacturing businesses.
Implications and outlook
For bondholders and lenders, the AA+ reaffirmation supports continued access to low-cost capital as Tata Power undertakes one of the sector's largest capital-investment programmes.
The key issue for analysts remains execution, with plans for renewable additions of 2–2.5 GW annually over the next three years.
CARE highlighted refinancing risk, interest-rate exposure and weather variability across renewable assets as key monitorables.
Wider significance
CARE stated that the rating continues to benefit from Tata Power's diversified business profile and strategic importance within the Tata Group.
With a 16.7 GW operational base, Tata Power remains among India's largest integrated power utilities.
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