Fitch affirms Adani Ports' 'BBB-' Rating, removes from Rating Watch Negative; outlook remains negative

New Delhi [India], March 12 (ANI): Fitch Ratings has affirmed Adani Ports and Special Economic Zone Limited's (APSEZ) Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BBB-' and removed it from negative">Rating Watch Negative (RWN), while maintaining a Negative Outlook.
According to an article on the website of Fitch, the the affirmation follows the Adani group's demonstration of adequate funding access, particularly after the US indictment of board members from another group entity, Adani Green Energy Limited, in November 2024.
Fitch believes the risk surrounding the group's liquidity and funding needs has moderated, but the Negative Outlook reflects concerns over the potential impact of ongoing US investigations. The outcome of these investigations could expose further weaknesses in corporate governance, which may lead to a negative rating action.
The rating reflects APSEZ's robust business and financial profile, underpinned by its diverse portfolio of seaports, including the flagship Mundra Port, and strong liquidity. With a cash balance of INR77 billion as of December 2024, APSEZ is well-positioned to meet debt maturities of INR66 billion by FY26, while also funding its capital expenditures. The company benefits from flexibility in project execution and strong cash flow.
However, Fitch has also noted constraints on APSEZ's rating due to governance concerns, as well as India's 'BBB-' Country Ceiling.
The rating agency highlighted APSEZ's strong market position and operational efficiency but emphasised that its governance assessment limits the potential for a higher rating.
Fitch's base-case financial projections assume solid cargo volume and tariff growth, with a manageable debt load. Despite its solid financial profile, APSEZ's rating remains capped by external factors like India's Country Ceiling and ongoing governance scrutiny. (ANI)