Crisil Upgrades Adani Power Loan Facilities Rating from A to AA-

Crisil Ratings has upgraded its ratings on Adani Power's Rs 38,000 crore of bank loan facilities to 'AA-,' saying the company's business and financial risk profile has seen "big improvement." The loan facilities were rated 'A' with a stable outlook earlier.

"The rating upgrade follows the strong improvement in the business and financial risk profiles of APL," Crisil Ratings said in a report.

The upgradation is driven by better-than-expected operating performance backed by timely commissioning and ramp-up of the Godda power plant (1.6 GW), Mahan power plant (1.2 GW), full recovery of pending regulatory dues related to claims for fuel costs as pass-through under a change in law clauses of existing power purchase agreements (PPAs) and continued improvement in receivables, it said.

"The rating also factors in completing most regulatory investigations into Adani Group. Regulatory investigations in two remaining allegations are underway and are expected to be completed over the next three months," the rating agency said.

It further said that APL had recovered a majority of pending regulatory dues, including carrying costs and late payment surcharge (LPS) between April and October 2023 from counterparties, post-resolution of the matter in APL's favour through the order of Supreme Court of India in March and April 2023.

The company has received monthly receivables on a timely basis, including recurring regulatory claims, supporting its operating cash flow. The operational performance of APL has been strong with robust plant load factor (PLF) and healthy operating margin, it said.