Joint venture of Adani Ports & SEZ gets India's 1st AAA rating in Private Infrastructure

One of the largest profit contributors for Adani Group, Adani Ports & SEZ (APSEZ) has been rewarded with AAA rating by Care Ratings. This is the highest rating given to an issuer by credit-rating agencies in India, which signifies strong credit worthiness and the capacity to repay investors.

The phenomenal achievement reflects significance for India's private infrastructure sector, marking APSEZ as the first and only private infrastructure developer of its magnitude to get this recognition.

To be precise Adani Energy Solution has two transmission assets, one is West Transmission Gujarat Limited and another one is located in Alipurduar, West Bengal. Both of these plants have been rated AAA ratings by India Ratings. In the company level, APSEZ comes at the first place. 

The ungradation of this rating system signifies APSEZ's robust business model, strong growth in operations with healthy profitability, coupled with high liquidity and low leverage.

The report by CARE says, "The ratings derive strength from healthy growth in scale of operations, steady PBILDT (Profit before Interest, Lease, Depreciation and Taxation) margins, demonstrated execution capabilities of APSEZ in the port sector and robust liquidity."

APSEZ's excellence is marked by net external debt/PBILDT(Profit before interest, lease, depreciation and tax) steadily improved from 3.62 times as on March 31, 2021 to 3.14 times as on March 31, 2023. However, APSEZ repaid nearly USD 325 million till December 2023 by the progressive buy back of $650 million bonds (due in July 2024), which resulted in net external debt/PBILDT at 2.41x as on December 31, 2023.

The report highlighted that, the company's successful track record of turning around port assets post-acquisition and its integrated business model including ports with logistics asset base which has led to 15% compounded annual growth for FY19-FY24 as compared to 4% CAGR for all Indian ports.

The report included, “The large banks at Mundra, Dhamra and Krishnapatnam also enhance the prospects." APSEZ has evolved from operating just two ports in Mundra and Dahej during 2011 to a portfolio of 14 ports spread across the entire coastline of India. A comprehensive range of integrated service offerings, including SEZ and logistics, have contributed to the company's remarkable growth. It has 27% volume of market share.

APSEZ is regarded as India's largest port developer and operator by volume with a total capacity of 607 MMT, with the Mundra Port being the largest commercial port in India in terms of cargo handling.