S&P stabilizes Adani Electricity view

S&P said it revised its outlook for Adani Electricity Mumbai Ltd. to stable from negative and affirmed the BBB- ratings on the company and its senior secured notes.

The outlook revision reflects the expected credit quality improvement at the company’s parent Adani Transmission Ltd., the agency said.

“Proposed equity infusion from a strategic investor, International Holding Co. (IHC), will improve leverage and credit quality of the consolidated ATL group (which includes ATL and all its subsidiaries). IHC, the investment arm of the Abu Dhabi royal family, seeks to invest about Indian rupee (Rs.) 38.5 billion ($500 million) in ATL for an equity stake of 1.41% on a post-issuance basis,” S&P said in a press release.

The agency said it estimates improvement in the group's consolidated funds from operations (FFO)-to-debt ratio to 9.5% in fiscal 2023 (ending March 31, 2023) and 11%-11.7% over fiscals 2024 and 2025. “This is higher than our previous expectation of 8.2% in fiscal 2023 and 9.5% thereafter.”

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