Whopping Rs 1 lakh crore npa resolution of stressed power projects possible; banks' haircut to be this much.

A successful resolution of non-performing assets worth Rs 1 lakh crore in coal-based power projects is possible with a 40%-60% haircut, a report has said. India's coal-based power projects are staring at least Rs 3.8 lakh crore worth of NPAs.

If lenders are willing to take 40-60% haircut, they can be able to resolve as much as Rs 1 lakh crore of debt stuck in coal-based power projects, rating agency Crisil said, adding that it will also enhance the viability of these projects on a sustained basis.

"The haircuts and safeguards, if implemented, would ease debt servicing for these capacities and will, in turn, lower their cost of generation by 30% to Rs 3.7 per unit for the next 5 years. That would be well below the current average cost of power procurement for state distribution companies (discoms)," Subodh Rai, Senior Director, Crisil Ratings said.

The Crisil analysis is based on the assessment of 16,000 MW power assets, which account for nearly two-thirds of stressed and operational coal-based capacities. Power projects, which became stressed due to several reasons including costs over-runs, inadequate PPAs and fuel supply...