Fitch Revises Outlook on Adani Ports, Energy to Stable

New Delhi, Nov 5 (PTI) Fitch Ratings has revised its outlook on two Adani group firms, Adani Ports and Special Economic Zone and Adani Energy Solutions, to 'Stable' from 'Negative', saying the contagion risks across the conglomerate have eased.

Fitch affirmed the two companies' long-term issuer default ratings at 'BBB-'.

The agency also affirmed the 'BBB-' ratings on Adani Electricity Mumbai Ltd's (AEML) senior secured notes and those issued by Adani Energy Solutions Ltd's (AESL) subsidiary, Adani Transmission Step-One Ltd.

The outlook revisions reflect Fitch's view that contagion risks across the Adani Group have eased.

The conglomerate has retained access to diversified funding sources despite a November 2024 US indictment involving board members of a group entity, Adani Green Energy Ltd.

Fitch also cited a September 2025 ruling by India's market regulator Sebi, which found no violations of disclosure norms or evidence of market manipulation as alleged in a 2023 short-seller report.

Fitch said liquidity and funding remain adequate across both entities, underpinned by robust cash flows and continued investment momentum. Adani Group firms have raised more than USD 24 billion from onshore and offshore lenders since late 2024, with AESL alone borrowing USD 1.8 billion for expansion.

The 'Stable' outlook reflects "Fitch's views on easing contagion risk as Adani group has demonstrated access to diversified funding sources, despite the November 2024 US indictment relating to certain board members of a group entity, Adani Green Energy Limited," the rating agency said in a note.

Fitch believes the contagion risk from the US investigations has eased for AESL and AEML, considering their demonstrated access to diversified funding sources since the allegations and the lack of a specific direct indictment.

Furthermore, the Securities and Exchange Board of India, in its September 2025 order, stated that Adani Group companies' actions did not violate regulatory disclosure norms or constitute market manipulation, as alleged in a 2023 short seller report.

"The group continues to invest in projects, with capex picking up in the first half of the financial year ending March 2026 (FY26)," it said.

For Adani Ports and Special Economic Zone Ltd (APSEZ), Fitch noted a strong business profile supported by geographically diversified ports, advanced logistics infrastructure, and sustained throughput growth, with total debt-to-EBITDA expected to stay below 2.5x through FY29.

AESL's leverage is forecast to rise to 5.9x in FY26 due to higher capital expenditure before easing to 5.7x by FY28, supported by new transmission and smart-metering projects.

Fitch added that both companies benefit from stable regulatory frameworks, predictable revenues, and solid operating performance. Adani Electricity's coverage ratios remain comfortable, while APSEZ continues to post EBITDA margins around 55 per cent and maintains flexibility in its investment programme.

AEML's earnings and cash flows, it said, remain sufficient to fund most of its capex, with an expected EBITDA-to-net interest coverage of 2.4x in FY26, above the downgrade sensitivity level.

The agency said both AESL and AEML continue to benefit from high asset availability, strong operating performance, and stable regulatory returns, supported by professional management and oversight, including AEML's strategic investor Qatar Investment Authority.

APSEZ, India's largest commercial port operator handling about a quarter of the country's cargo through 15 ports, benefits from diversified operations, strong infrastructure and long-term customer contracts.

Fitch expects annual cargo growth of 10-15 per cent and EBITDA margins of about 55 per cent, with total debt-to-EBITDA projected to stay below 2.5x through FY29.