Fitch affirms ‘BBB-’ credit rating of Adani Ports

24 Mar 2023 , 11:59 AM

According to a statement released by Fitch Ratings, the long-term foreign currency Issuer Default Rating (IDR) of Adani Ports and Special Economic Zone Limited (APSEZ), an Indian port operator, has been affirmed at ‘BBB-‘, and the outlook is considered stable.

Fitch Ratings stated in their report that the Hindenburg report controversy is not likely to have a significant impact on APSEZ’s funding costs or accessibility in the near future, based on the current rating level.

Fitch Ratings noted that they anticipate Adani Ports and Special Economic Zone Limited’s (APSEZ) financial flexibility to remain strong due to its extensive collection of seaports, which are strategically positioned and boast superior operational efficiency, in addition to a sufficiently strong liquidity position.

Fitch Ratings pointed out that nearly 50% of APSEZ’s cargo is considered ‘sticky,’ meaning it includes take-or-pay cargo under contract, as well as cargo sourced from joint-venture partners that cannot be easily redirected to other ports due to constraints such as inadequate facilities for handling crude oil.

Fitch Ratings has updated the Environmental, Social, and Governance (ESG) evaluation for Adani Ports and Special Economic Zone Limited (APSEZ), lowering the scores for Governance Structure and Group Structure to ‘4’ from ‘3’. The revised score reflects governance inadequacies at the parent company level and in other entities within the Adani Group.

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