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Fitch Ratings has affirmed the ‘BBB-’ ratings on the $400-million senior secured notes issued by Adani Transmission Limited.
The outlook is stable. The restricted group (ATL RG1) includes six co-issuers - Barmer Power Transmission Service Limited, Chhattisgarh-WR Transmission Limited, Hadoti Power Transmission Service Limited, Raipur-Rajnandgaon-Warora Transmission Limited, Sipat Transmission Limited and Thar Power Transmission Service Limited - and one non-issuing SPV, Adani Transmission (Rajasthan) Ltd (ATRL).
RATING RATIONALE
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.
However, the project companies have longer-term residual exposure to inflation in light of the mismatch between the operating and maintenance (O&M) cost escalation rates and the largely unindexed revenue base. The PPP-8, PPP-9 and PPP-10 projects are also exposed to heightened payment delay risks associated with long-term transmission customers in of Rajasthan, which could result in increased working-capital requirements.
Fitch projects an average debt-service coverage ratio (DSCR) of 1.48x, with a profile DSCR of 1.30x between the financial years ending March 2027 (FY27) and FY33 under our rating case. The restricted group’s financial profile is stronger than that commensurate with a ‘BBB-’ rating for this portfolio of assets, reflecting considerable rating headroom at the current level. The credit assessment is constrained by India’s (BBB-/Stable) ‘BBB-’ Country Ceiling.
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