Rating agency Fitch has affirmed 'BBB-' rating to NTPC, indicating a low default risk on debt. "Fitch Ratings has affirmed NTPC Limited's long-term issuer default rating at BBB-. The outlook is stable," the agency said in a statement. The BBB rating indicates that expectations of a default risk are low. The capacity for payment of financial commitments is considered adequate, but adverse business or economic conditions are more likely to impair this capacity. According to the statement, NTPC's ratings benefit from its dominant market position and regulated business model, which provides certainty of cash flows. The agency has also affirmed NTPC's senior unsecured rating of 'BBB-' and the 'BBB-' on its USD 4 billion medium-term note programme. The company has managed its counterparty risk well with 100 per cent collection efficiency for the past 13 years despite a weak financial position of many of its customers. The company's high capex requirement is likely to lead to negative free cash flows over the next 3-4 years. "Fitch assesses that the linkages between NTPC and the Indian state (BBB-\/Stable) are moderate," it said. Based on the parent and subsidiary linkage criteria, Fitch will provide a one-notch rating uplift to NTPC's ratings if the company's standalone ratings were to be lower than that of the sovereign, provided the linkages remain intact. The company has long-term power purchase agreements (PPAs) for all of its plants, which allow pass-through of fixed costs as well as fuel costs. NTPC plans to bid for ultra-mega power plants - of 4 GW capacity each - as and when these are offered and acquire state-owned thermal power plants. "Fitch has not factored either of these events into its ratings and will analyse the impact if and when they materialise," the agency said.