India Ratings upgrades Adani Green Energy to ‘IND AA-’ with Stable outlook


India Ratings and Research (Ind-Ra) has upgraded Adani Green Energy Ltd’s (AGEL) long-term issuer rating to ‘IND AA-’ from ‘IND A+’. The outlook is Stable.

The upgrade factors in AGEL’s continued strong operational asset performance; strong execution scale-up with annual capacity additions likely to be 4 GW-5 GW annually over the medium term from the earlier 2.5-3.5 GW; and healthy counterparty diversification and reduction in receivables, leading to an increase in the cash flow from operations.

The upgrade also reflects AGEL’s change in policy with respect to the  leveraging of the holding company, as the company has now earmarked funds towards the repayment of $750 million holdco bond.

In addition, India Ratings noted the creation of a platform within AGEL with Total Energies SE, which allows for part asset monetisation while retaining consolidation benefits, the equity infusion by the promoters through warrants (of which 25% has already been received), and the continued ability of the company to tie up both debt and raise equity to ensure fully funded under-construction portfolio.

The ratings also reflect Ind-Ra’s expectation of favorable operational to under-construction book ratio, given the operational capacity of nearly 10.9 GW, and an increase in annual capacity addition targets to 5 GW and the amortising structure of the debt as against bulleted structures earlier.

“The ratings continues to factor in AGEL’s robust execution track record; the strong operational performance of its assets with plant load factors (PLFs) between P50-P90 levels of the operational assets; healthy diversification among counterparties, with majority of counterparties belonging to highest credit quality; portfolio diversification achieved both geographically and in generation sources across wind and solar; and healthy cash upstreaming from the operating special-purpose vehicles when the restricted covenants are met, thus allowing for debt servicing at the holdco,” stated India Ratings.


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