Fitch Ratings has a negative outlook on Adani Ports and Special Economic Zone Co., Ltd. (APSEZ) led by Gautam Adani, and confirmed its long-term foreign currency default rating (IDR) as BBB. He said that although its rating is restricted by the Indian national “BBB-” ceiling. -Adani Ports shares closed today at 762 rupees per share, 1% lower than the previous closing price of BSE.
National Securities Depository Ltd (NSDL), which froze three foreign securities investment accounts (FPI) of three Adani companies. APSEZ’s credit status reflects its status as the country’s largest commercial port operator, with the highest operating efficiency among similar ports. The company has shown strong performance throughout the economic cycle, including the current Covid-19 recession.
In the fiscal year ending March 2021 (21st tax year), APSEZ’s cargo throughput increased by nearly 2% (including Krishna Patnam Port Co., Ltd. (KPCL), 11%), The cargo throughput of all ports in all countries dropped by nearly 5%. Approximately 56% of APSEZ’s cargo is viscous cargo, including cargo under take-or-pay contracts, cargo that is unlikely to be transferred to other ports due to lack of crude oil processing capacity and other infrastructure constraints.
APSEZ has time flexibility in its expansion project. According to the report, the company’s capital expenditure budget for fiscal year 22 is about 30 to 40 billion rupees, but the report says that this amount may be reduced to 8 billion rupees for maintenance only.“We believe that APSEZ has sufficient liquidity to meet short-term challenges. In fiscal year 21, the company has approximately 530 billion rupees in available cash, operating expenses of 33 billion rupees, and interest expenses of approximately 21 billion rupees,” it said.
APSEZ has 14 billion rupees to be repaid or refinanced in 22 fiscal years. The adjusted net debt/EBITDAR rating rationale of Fitch Ratings Project will average 3.6 times in FY22-26. If management manages to maintain its consolidated EBITDA margin, the index may also fall below 3.0 times. 65%, he said.
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