CHENNAI: For the Tamil Nadu Electricity Board (TNEB), it couldn’t get worse. Rating agency ICRA has assigned it the lowest grade of Default (‘D’) on a 20-point scale - down from BB+, which stands for significant risk to lenders.Top TNEB officials, however, are unfazed. They claim this is just a passing cloud. “We think the agency has given us this rating based on certain isolated incidents. It does not reflect the whole picture,” an official told Express.The TNEB has not defaulted payments to banks. “Sometimes, there might have been some delay. We think the agency could have gone by this. Normally, we have a 90-day grace period from the actual due date. We are not aware if the agency took this into account.”The TNEB Limited, Tamil Nadu Generation and Distribution Corporation and Tamil Nadu Transmission Corporation Ltd are wholly owned by the State government and a regulated monopoly. “ICRA has recognised this in their rating. Hence, it is unlikely to affect the borrowing prospects. At the same time we are taking all efforts to come out of the financial crisis.”When asked about the issue, an ICRA spokesperson told Express that is rating norms were rigid. “Even if there is a delay of one day in repaying loans, the D category would be applicable. Payment should be made on or before the due date.” The rating ‘D’, however, covered only the short and long term loans from banks and not other kinds of debt instruments.“This rating must not be construed as a recommendation to lend or not. This is only an input for lenders to arrive at a decision.” The rating will be reviewed after a period of three months. If the Board takes significant steps to improve its financial situation, a better rating could be assigned, he added.
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