India Ratings & Research Pvt. upgraded Adani Power Ltd.'s bank facilities on Thursday to 'IND AA-' with a stable outlook.
The upgrade reflects the resolution of the key regulatory issues with respect to the Lohara coal block, receipt of regulatory claims for past orders, the ratings agency said in a release.
It also cited the signing of supplementary power purchase agreements for the Haryana PPAs at Mundra plant, start of commercial operations of the Godda plant, and adequate coal availability for both merchant and PPA capacities, resulting in healthy plant load factor.
The receipt of past regulatory claims and debtor realisation resulted in a significant reduction in Adani Power's debt in the first nine months of the current financial year, according to India Ratings.
It said the Adani Group company could continue to generate a sustainable Ebitda of Rs 130 billion.
Adani Power is now the largest independent power producer in the country with an operational capacity of 15.2 gigawatts, out of which 81% is tied up on the long and medium-term PPAs, India Ratings said.
The power producer received a significant amount of regulatory dues in past claims post the favourable resolution of the matters through the Supreme Court orders in March and April 2023, which were utilised to retire perpetual and related part debt of Rs 125.6 billion and senior debt prepayment of Rs 29.3, it said.
It resulted in the likelihood of Adani Power's gross leverage staying below 2.5–3 times, better than the earlier expectation, according to India Ratings.
The company is additionally looking at refinancing the entire debt and move from an asset-level financing to corporate-level funding, allowing better utilisation of collective cash flows, it said.
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