S&P Upgrades Adani Int Container's Credit Profile, Affirms 'BBB-' Rating

Standard and Poor's (S&P) has upgraded the Adani International Container Terminals Pte Ltd's (AICTPL) preliminary standalone credit profile (SACP) from "bb+" to "bbb-". The company is expected to maintain a stronger-than-expected operating and financial performance.

S&P has affirmed the company's rating at 'BBB-' with a stable outlook.

AICTPL is a 50-50 joint venture between Adani Ports and Special Economic Zone Ltd and Terminal Investment Ltd (TIL). It works as a container terminal operator based in Mundra, Gujarat. It is at a prime location with favourable water depth compared with other nearby ports, besides broad rail and road connectivity to India's industrial hinterland.

“We expect AICTPL to maintain stronger credit metrics amid high growth in cargo volumes handled at the port, combined with lower-than-expected bond coupon” it said.

AICTPL saw significant throughput volume growth in financial year ended March 31, 2021, buoyed by strong global shipping activities during Covid-19. Cargo volumes (export and import) were up 33.7 per cent, while trans-shipment was up 71 per cent. This volume growth was also partially due to the operational disruptions at nearby Jawaharlal Nehru Port.

Throughput volume trend remained strong in the first half of the financial year 2022 (up to September 30, 2021), with 10.9 per cent growth year on year. Due to a broad cargo variety from its catchment area, AICTPL's cargo volume is not particularly reliant on one product base, and therefore not significantly held back by production shortages.

The rating agency said the final bond coupon of three per cent was lower than initial assumption, leading to stronger metrics throughout the project life compared with its previous forecast.

"The stable outlook reflects our expectation that AICTPL will maintain a stable cash flow with fully market-based pricing and volume over the next 12-24 months," it said.

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor