Fitch Ratings has reaffirmed Adani Ports and Special Economic Zone Limited’s (APSEZ) Long-Term Foreign-Currency Issuer Default Rating at ‘BBB-‘ and removed it from Rating Watch Negative (RWN), but maintained a Negative Outlook. The rating agency acknowledged that the Adani group’s demonstration of adequate funding access, following the US indictment of board members in November 2024, has moderated the risk surrounding the group’s liquidity and funding needs. However, the Negative Outlook reflects concerns over the potential impact of ongoing US investigations on the group’s corporate governance, which may lead to a negative rating action.
The ‘BBB-‘ rating is based on APSEZ’s robust business and financial profile, driven by its diverse portfolio of seaports, including the flagship Mundra Port, and strong liquidity. The company has a cash balance of INR77 billion as of December 2024 and is well-positioned to meet debt maturities of INR66 billion by FY26, while also funding its capital expenditures. However, the rating is constrained by governance concerns and India’s ‘BBB-‘ Country Ceiling.
Fitch has highlighted APSEZ’s strong market position and operational efficiency, but emphasized that its governance assessment limits the potential for a higher rating. The agency’s base-case financial projections assume solid cargo volume and tariff growth, with a manageable debt load. Despite its solid financial profile, APSEZ’s rating remains capped by external factors like India’s Country Ceiling and ongoing governance scrutiny. Overall, the rating reflects a balance between APSEZ’s robust business and financial profile and the risks associated with its governance and the broader Indian economic environment.