Fitch affirms Adani Energy Solutions rating at 'BBB-'; outlook stable

Fitch has also affirmed Adani Energy guaranteed $500 million senior secured notes, due in 2026 and $500 million bonds due in 2036 at 'BBB-'.

“We expect EBITDA net leverage to remain commensurate with the rating over the medium term. Higher capex, largely in the smart metering business segment, could see net leverage temporarily rise above 6.0x…but we expect it to come down well below 6.0x by FY26,” Fitch Ratings said.

The rating affirmation also reflects Fitch’s view that risks to funding access for Adani Energy and the cost from alleged governance issues at Adani group have eased. This is after the Supreme Court in January said the case does not warrant a transfer of investigation from the Securities and Exchange Board of India (Sebi).

“The group has demonstrated sound debt-market access, both domestic and international, over the last six months. We would consider any significant impact on the group from the ongoing investigation as an event risk,” the global ratings agency said.

Adani Energy’s credit profile benefits from India's stable and favourable regulatory environment.

“We expect revenue for its transmission assets, under cost plus and TBCB, to continue contributing a large majority of EBITDA in the medium term, even as the contribution from its smart metering business increases,” Fitch said.