With State Electricity Boards emerging as leading monopsonistic buyers from Independent Power Producers, their credit quality assessment is an important concern for IPPs and lenders. This paper provides an approach in the Indian context The assessment is done along two dimensions viz. assessment of business risk and financial risk. The former is assessed in terms of Market indicators and Operating indices. Market indicators, in turn cover a) Consumer mix, ability to increase tariffs and Government support by way of paying for social objectives, and b) demand growth. The operating indices cover the hydro-thermal mix, PLF, T&D losses and No. of employees per million units sold, and the extent of external dependence. The Financial risk is measured by such yardsticks like profitability, interest burden, and surplus left after loan repayment obligations. All the data is from a single Report of the Planning Commission on the working of State Electricity Boards.