India Ratings & Research (Ind-Ra) has assigned SJVN a long term issuer rating of 'AA+'. The outlook is stable. The agency has also assigned the company's Rs 4,000 million term loans an 'AA+' rating.

SJVNL operates its hydro power plants under the cost plus RoE framework outlined by the Central Electricity Regulatory Commission (CERC), which ensures reasonable recovery of costs along with a 16.5% return on equity. Moreover, foreign exchange rate variation risks can also be passed-through to off-takers thus protecting SJVNL.

The company's upcoming projects will also operate on the same model thus de-risking the business model. The framework ensures cash flow stability and predictability. Additionally, CERC has approved a D/E ratio of 50:50 for the Natpha Jhakri Hydro Power Station (NJHPS) (normative: 70:30) thus leading to higher cash flows over the life of the project.

Shares of the company declined Rs 0.40, or 1.73%, to trade at Rs 22.70 at the BSE (1.07 p.m., Monday).