Fitch Affirms Rating Of Adani Transmission's Restricted Group Notes At BBB-
Fitch says the 'credit assessment of the restricted group reflects the project companies' availability-based revenue'.
Fitch Ratings Inc. has affirmed the 'BBB-' ratings on Adani Transmission Ltd.'s $400-million senior secured notes, while the outlook for the firm is 'stable'.
The restricted group includes six co-issuers—Barmer Power Transmission Service, Chhattisgarh-WR Transmission, Hadoti Power Transmission Service, Raipur-Rajnandgaon-Warora Transmission, Sipat Transmission and Thar Power Transmission Service. It also includes a non-issuing special purpose vehicle—Adani Transmission (Rajasthan).
"The credit assessment of the restricted group reflects the project companies' availability-based revenue under a supportive regulatory framework, with low technical complexity, reflected in high availability levels and operating performance that we expect to remain stable," Fitch said.
However, the project companies have a longer-term residual exposure to inflation in light of the mismatch between the operating and maintenance cost escalation rates, and the largely unindexed revenue base, it said.
The ratings agency expects a debt-service coverage ratio of 1.48 times with a profile DSCR of 1.30 times between the financial years ending March 2027 and 2032–33.
"The PPP-8, PPP-9 and PPP-10 projects are also exposed to heightened payment delay risks associated with long-term transmission customers in the Indian state of Rajasthan, which could result in increased working-capital requirements."
The providers may earn incentive payments if annual availability exceeds the target of 98%, it said. "However, unavailability penalties are uncapped and not passed through to the operator. None of the SPVs have been subject to penalty deductions due to high availability levels during the assets' limited operating histories within the designated SPV."
The credit assessment is "not directly affected by the alleged malpractices at India's Adani Group highlighted in Hindenburg Research's report due to the ringfenced nature of these assets".
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