Ahmedabad, Nov 11 (NationPress) BofA Securities reported on Tuesday that the operations of Adani Group continue to thrive due to robust structural protections, which demonstrate strong market access. The Group's solid asset base plays a crucial role in anchoring cash flow and the credit profile of its USD bond issuers across the ports, utilities, and renewable sectors.

The Adani Group has successfully showcased its operations, expansion, and market access despite facing global scrutiny, as ratings have remained stable while outlooks and watches have shifted. According to the global brokerage, the Group's strong credit fundamentals reinforce their optimistic view on the USD bonds.

BofA notes that the holding companies of the Group's USD bond issuers have demonstrated improved fundamentals over the past two years, supported by EBITDA growth driven by capacity expansion and a decrease in leverage.

“Looking forward, we anticipate that ADSEZ's credit profile will further enhance, bolstered by its diversified ports, consistent volumes, and efficient operations. We project ADSEZ's leverage to remain at 2.5x, even with substantial investments,” stated the global brokerage.

The Adani Group stands as one of India's largest conglomerates, operating across various infrastructure sectors with 12 listed entities and an approximate market capitalization of $200 billion.

“We predict that Adani Transmission Ltd (ADTIN) and Adani Electricity Mumbai (ADANEM) will sustain stable credit profiles backed by their diversified operations and regulated or long-term fixed-price contracts,” the report further elaborated.

BofA forecasts that both ADTIN and ADANEM will maintain leverage below 6x and coverage exceeding 2x over the next three years, despite ADTIN's ambitious capex plan, while ADANEM will benefit from maintenance-like modular outlays.

“The credit profile of restricted groups - ADINCO (AdaniConneX), Adani Green Energy Limited (ADGREG), and Adani Renewable Energy (ARENRJ) will gradually enhance as the debt amortizes per bond indentures,” it added.

The Adani Group's USD bonds have seen notable volatility since early 2023. However, continual market access and the absence of negative conclusions from domestic regulators have facilitated a strong recovery across the complex.

Year-to-date, the bonds have outperformed with tightening between 80-325bps and trading 14-64 bps below pre-US indictment levels.

“The operational resilience and ongoing liability management reinforce our positive outlook on the complex, despite year-to-date tightening. We maintain an Overweight position on ADSEZ 31s/32s, ADINCO 31s, ADTIN 36s, and ADANEM 30s, backed by strong credit fundamentals and appealing relative valuation,” the report concluded.