New Delhi, Nov 5 (IANS): Private sector power generator Tata Power has secured a rating upgrade by CRISIL over its deleveraging initiatives that involved sale of non-core assets and preferential allotment of equity.

The rating agency upgraded its rating of the company to 'CRISIL AA' from 'CRISIL AA-' on the non-convertible debentures and long-term bank facilities.

Besides, outlook on the rating has been revised to 'Stable' from 'Positive'. The rating on Tata Power's commercial paper programme has been reaffirmed at CRISIL A1+.

The rating upgrade has been driven by the deleveraging initiatives such as sale of non-core assets (South African wind asset and shipping business) and the preferential allotment of equity undertaken by the Company, Tata Power said in a statement.

The rating factors in management's intent to keep net debt to EBITDA sustainably below 3.5 times including by divesting majority stake in the renewable portfolio through a proposed Infrastructure Investment Trust (InvIT).

"This rating upgrade recognizes the significant efforts of the company to strengthen the fundamentals," said Praveer Sinha, CEO and Managing Director, Tata Power. "The company is on course to achieve the deleveraging and restructuring of business as laid out in its long term strategy which will bring greater value for our stakeholders."