Rating outlook for Adani Ports and Special Economic Zone Limited (APSEZL) has been revised to Negative from Stable on account of the deterioration in the Group’s financial flexibility, following a sharp decline in share prices and an increase in the yield of international bonds raised by group entities .
ICRA notes that the Group’s strong financial flexibility and APSEZL’s track record of refinancing a large part of its debt with borrowings (mostly from overseas debt capital markets) of longer tenures at lower interest rates were the key credit strengths, which have been adversely impacted.
ICRA will be monitoring the Group’s ability to raise funds from domestic/global market as equity/debt at competitive rates. Further, ICRA sees an increased risk of regulatory/legal scrutiny on the group entities and its impact on the credit quality of APSEZL will be monitored. However, ICRA notes that the APSEZL’s liquidity profile remains robust and a large repayment of international bond of $650 million is due only in FY2025.