New Delhi, May 9 -- Fitch Ratings has affirmed stable outlook for three state-owned infrastructure financing companies -- REC Limited, Power Finance Corporation Ltd, and Indian Railway Finance Corporation Limited.

For REC Ltd, Fitch said REC is strategically important in implementing power sector reforms to boost India's economic growth and development, while its provision of financing and refinancing to projects ensures liquidity in the power sector value chain, particularly to weak distribution companies.

Fitch believes REC's default would most likely disrupt provision of financing and refinancing for projects in the power sector, and might trigger a political crisis.

"Our assessment also considers the company's material market share...