Adani Power's Credit Rating Upgraded To 'AA-' By Crisil, Outlook Stable

Crisil Ratings Ltd. has upgraded Adani Power Ltd.'s bank loan facilities to ‘Crisil AA-/Stable’ rating from ‘Crisil A/Stable', based on improvements in the business and financial risk profile.

The improvement in financials was driven by better operating performance, the full recovery of pending regulatory dues, and continued improvement in receivables, the rating agency said in a note on Monday.

Cash accrual in FY24 has been utilised for prepayment of a portion of external debt, leading to a more-than-expected correction in leverage and a healthy improvement in liquidity, it said.

The business risk profile is expected to be supported by the sustenance of healthy operational performance over the medium term, led by strong operating efficiency, according to Crisil.

The rating also factors in the completion of most of the regulatory investigations into Adani Group, the agency said.

The company's consolidated operating Ebitda will likely remain healthy at over Rs 12,000 crore per annum for fiscal 2024 and 2025, it said. "However, any moderation in power demand leading to lower-than-expected volume and profitability for APL will remain monitorable."

With both organic and inorganic routes, Adani Power has significant capital expenditures in the pipeline, Crisil said.

Exposure to counterparty risk, having a moderately weak credit profile, and risks associated with brownfield expansion and growth through acquisitions are the weaknesses for the company, it said.

Shares of Adani Power closed 2.32% lower at Rs 546.35 apiece on the BSE, as compared with a 0.49% decline in the benchmark BSE Sensex.

Disclaimer: NDTV is a subsidiary of AMG Media Networks Limited, an Adani Group Company.