Crisil upgrades rating on Adani Power bank loan facilities

Crisil Ratings has upgraded its ratings on Adani Power's Rs 38,000 crore of bank loan facilities to 'AA-', saying the business and financial risk profile of the company has seen "strong improvement".

The loan facilities were rated 'A' with a stable outlook earlier. "The rating upgrade follows the strong improvement in the business and financial risk profiles of APL," Crisil Ratings said in a report. The upgradation is driven by better-than-expected operating performance backed by timely commissioning and ramp-up of the Godda power plant (1.6 GW), Mahan power plant (1.2 GW), full recovery of pending regulatory dues related to claims for fuel costs as pass-through under change in law clauses of existing power purchase agreements (PPAs) and continued improvement in receivables, it said. "The rating also factors in the completion of most of the regulatory investigations into Adani Group.

Regulatory investigations in two remaining allegations are underway and are expected to be completed over the next three months," the ratings agency said. It further said that APL has recovered a majority of pending regulatory dues, including carrying costs and late payment surcharge (LPS) between April and October 2023 from counterparties, post-resolution of the matter in APL's favour through the order of Supreme Court of India in March and April 2023. The company has been receiving monthly receivables on a timely basis, including recurring regulatory claims, supporting its operating cash flow.

The operating performance of APL has been strong with robust plant load factor (PLF) and healthy operating margin, it said. The company had better-than-expected operating earnings before interest, taxes, depreciation and amortisation (Ebitda) of Rs 10,041 crore for fiscal 2023 and Rs 7,926 crore for the first half of fiscal 2024 (Rs 10,280 crore in fiscal 2022).