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Moody's Upgrades Outlook for 3 Adani Firms, Reaffirms Credit Ratings

Moody's Ratings has upgraded the outlook to stable from negative for three Adani Group companies: Adani Ports and SEZ, Adani Transmission Step-One Limited, and Adani Electricity Mumbai Limited. The agency reaffirmed their Baa3 investment-grade ratings, citing solid liquidity access and robust financial profiles over the next 12-18 months. It noted that the companies' planned capital spending is discretionary, supporting their credit strength. The rating affirmations also reflect predictable revenues from regulated or contracted utility assets, though elevated leverage at some entities was acknowledged.

Key Points: Moody's Upgrades Outlook on Key Adani Group Entities

  • Outlook upgraded to stable from negative
  • Ratings reaffirmed at Baa3
  • Strong liquidity and credit profile cited
  • Growth spending seen as discretionary
  • Regulatory support for utility assets noted
2 min read

Moody's upgrades outlook on APSEZ, ATSOL, AEML; reaffirms ratings

Moody's upgrades outlook to stable for Adani Ports, Adani Transmission, and Adani Electricity Mumbai, reaffirming their investment-grade ratings.

"APSEZ would maintain solid access to liquidity and a credit profile in line with its Baa3 rating - Moody's Ratings"

New Delhi, January 15

Moody's Ratings has upgraded the outlook of Adani Ports and SEZ, Adani Transmission Step-One Limited and Adani Electricity Mumbai Limited, and reaffirmed the ratings.

The APSEZ would maintain solid access to liquidity and a credit profile in line with its Baa3 rating over the next 12-18 months, the rating agency noted.

APSEZ's robust financial profile is supported by the discretionary nature of its planned capital spending for growth and funding access.

The ATSOL and AEML would maintain access to liquidity and a credit profile supportive of their investment grade ratings over the next 12-18 months, it has asserted.

Moody's said it will continue to monitor the proceedings and negative development in the process - if materialized - may still affect the group's access to capital and its ability to deliver on its growth objectives.

Basis above noting, Moody's has upgraded the outlook of Adani group entities: APSEZ - to Baa3/ Stable from Baa3/ Negative; ATSOL OG (basis AESL) - to Baa3/ STABLE from Baa3/ Negative; and AEML - to Baa3/ STABLE from Baa3/ Negative.

The affirmation of ATSOL's senior secured bond ratings reflects the company's close credit links with its wholly owned parent Adani Energy Solutions Limited (AESL) because of AESL's guarantee on the rated bonds and the event of default provisions linked to AESL's insolvency.

AESL's credit profile in turn reflects its diversified portfolio of quality transmission and distribution assets, which benefit from supportive regulatory regimes or longterm contracts with fixed tariffs, Moody's said.

The affirmation of AEML's senior secured bond ratings reflects the predictable revenue from its regulated utility business in Mumbai. At the same time, the rating affirmation considers AEML's elevated financial leverage, partly driven by its large capital spending in recent years.

- ANI

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Reader Comments

S
Sarah B
As someone who follows the markets, this upgrade is significant. Moving from 'Negative' to 'Stable' outlook for these large entities reduces systemic risk perception. However, the note about monitoring proceedings is a reminder that investors should stay cautious.
P
Priya S
Good to see AEML's rating affirmed. As a Mumbaikar, reliable electricity is crucial. I hope this financial stability translates into better service and infrastructure upgrades for the city without tariff shocks.
R
Rohit P
While the upgrade is welcome, we must not forget the "elevated financial leverage" mentioned for AEML due to large capital spending. Growth is good, but sustainable debt management is key for long-term health of these utilities.
V
Vikram M
APSEZ is a strategic asset for India's trade. Their solid liquidity access, as noted by Moody's, is reassuring for port operations and logistics. This strengthens our export-import corridor.
K
Karthik V
The market has been waiting for this. The 'Stable' outlook across three major entities should calm nerves and reflects the group's efforts to address past concerns. Let's see if this translates into lower borrowing costs for their future projects.

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