Ahmedabad, Jan 15 (NationPress) On Thursday, Moody's Ratings made a significant move by upgrading the outlook for Adani Ports and Special Economic Zone (APSEZ) from negative to stable, while also reaffirming its Baa3 investment grade rating. This decision underscores the agency's confidence in APSEZ’s creditworthiness and its positive long-term financial trajectory.

Additionally, Moody's confirmed the Baa3 senior secured ratings for Adani Transmission Step-One Limited (ATSOL) and Adani Electricity Mumbai Limited (AEML). It also reaffirmed the ‘(P)Baa3 senior secured MTN programme ratings’ for AEML, which stands as India’s leading integrated power utility provider.

The global rating agency highlighted that APSEZ will continue to enjoy strong liquidity access and will maintain a credit profile consistent with its Baa3 rating over the forthcoming 12 to 18 months.

“The robust financial structure of APSEZ is bolstered by the discretionary aspect of its capital investments aimed at growth, as well as its access to funding,” the report stated.

Moody's indicated that the outlook for all ratings has been shifted to stable from negative.

“The stable outlook reflects our belief that both ATSOL and AEML will sustain their liquidity access and maintain credit profiles that support their investment grade ratings in the next 12 to 18 months,” the note elaborated.

Delving into the reasons behind the rating enhancement, the agency noted that the affirmation of ATSOL's senior secured bond ratings is closely linked to its wholly owned parent, Adani Energy Solutions Limited (AESL), which guarantees these bonds and is affected by insolvency event provisions.

“AESL's credit standing is also indicative of its diversified portfolio consisting of high-quality transmission and distribution assets, benefiting from regulatory support and long-term contracts with fixed tariffs,” it added.

“Over the next one to two years, we anticipate that AESL's funds from operations (FFO)/net debt will remain slightly above the minimum acceptable level of 7.5%, considering the additional debt needed for substantial capital expenditures. The actual timing of capital outlays and related debt will also influence AESL's financial metrics,” stated Moody's Ratings.

Moreover, the affirmation of AEML's senior secured bond ratings signifies the steady revenue stream from its regulated utility operations in Mumbai.

“We project AEML will achieve cash flow from operations (CFO) pre-working capital/debt metrics between 10.5% and 11.5% over the next one to two years,” the note concluded.