India Ratings and Research (Ind-Ra) has affirmed Adani Green Energy Ltd’s (AGEL) long-term issuer rating at ‘IND AA-’ with a Stable outlook, following the successful refinancing of INR 89 billion in debt before the due date of March 31, 2025. It has also resolved the rating watch with negative implications.
“The successful refinancing of INR 89 billion before the due date demonstrates AGEL’s ability to raise capital and access to funding channels,” stated India Ratings. “Furthermore, the capacity addition’s pace has not been impacted because of the ongoing investigations against the promoters, which gives comfort on AGEL’s ability on execution of the large-planned capex,” it said, adding that “a continued drawdown on sanctioned limits has ensured that the projects are on track.”
The affirmation takes into account AGEL’s strong execution with a capacity addition of 3.3 GW during FY25 and an additional 1 GW likely by May 15, 2025, resulting in an operating capacity of around 15 GW. This strong operational efficiency led to the plant load factor (PLF) levels operating between P-50 and P-75 for projects, enabling higher EBITDA generation, competitive capital cost. Furthermore, there was an improvement in the operational to under-construction asset base to around 3x during FY E25 from 2x during FY20-FY21, which would continue improving over the medium term, according to Ind-Ra, resulting in a continued likely decline in leverage.
The rating also considers a healthy diversification among counterparties, with a majority of counterparties belonging to the 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 higher deployable equity for under construction projects.
India Ratings agency stated that given the strong cash flow from operations, 70%-75% of the same has been utilised towards meeting interest and principal obligations on senior debt; the balance has made been available towards meeting the equity requirements for new projects and for servicing the subordinated debt from TotalEnergies and the promoters. This, coupled with the balance promoter warrant money infusion of INR 70 billion over FY26, will ensure adequate availability of equity for the under-construction portfolio.
Ind-Ra expects the annual capex run rate to be stepped up to INR 250 billion-300 billion yearly over FY26-FY28 from about INR 248 billion in FY25, with capacity addition of around 5 GW each year. The same would entail an annual equity requirement of INR 60 billion-70 billion over FY26-FY28 yearly, of which nearly INR 70 billion will be promoter funds and INR 50 billon-INR 80 billion will be internally generated. Moreover, the company had free cash amounting to INR 40.2 billion at FYE25 (compared to INR 26.3 billion in FY 24 and INR 20.2 billion in FY 23).
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