Fitch affirms rating on Adani Transmission’s restricted group notes at ‘BBB-‘; outlook stable

“ATL RG1’s 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,” the global rating agency said.

The credit assessment reflects the project companies’ availability-based revenue, with low technical complexity, reflected in high availability levels and operating performance that Fitch expects to remain stable.

The offshore bond holders benefit from a robust cash flow mechanism and covenants that restrict cash upstreaming to shareholders and limit indebtedness, it said.

In fact, the restricted group’s financial profile is stronger than that commensurate with a ‘BBB-‘ rating for the portfolio of assets, reflecting considerable rating headroom at the current level, Fitch said.

The restricted group includes six co-issuers – Barmer Power Transmission Service Ltd, Chhattisgarh-WR Transmission Ltd, Hadoti Power Transmission Service Ltd, Raipur-Rajnandgaon-Warora Transmission Ltd, Sipat Transmission Limited and Thar Power Transmission Service Ltd – and one non-issuing SPV, Adani Transmission (Rajasthan) Ltd (ATRL).

There are no material short- to medium-term debt maturities reducing near-term liquidity and refinancing risks, the rating agency said. Shares of Adani Transmission ended negative for the 11th straight session on Thursday. It has been locked in lower circuits in all these sessions.

The allegations of corporate mis-governance, stock price manipulation, leveraged debt, and many others by Hindenburg Research have roiled Adani Group and triggered massive sell-off in the stocks. Adani Transmission stock has nosedived 73% since then. The stock ended 5% lower on Thursday at Rs 749.75.

On Thursday alone, the loss in market capitalisation of all 10 Adani Group stocks was Rs 20,000 crore. The total value of the 10 stocks has reduced by over 60% in the last one month to Rs 7.38 lakh crore.

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