Two Months After Hindenburg Report, Fitch Affirms 'BBB-' Rating On Adani Ports With Stable Outlook

"Fitch Ratings has affirmed India-based port operator Adani Ports and Special Economic Zone Limited's (APSEZ) Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BBB-'. The Outlook is Stable. The affirmation reflects its view that the Hindenburg report alleging governance issues at the Adani group has a limited near-term impact on APSEZ's cost of funding and access at the current rating level," it said.

Fitch expects the company's financial flexibility to remain supported by its robust portfolio of seaports, which comprises strategically located assets with best-in-class operational efficiency and an adequate liquidity position. It opined that APSEZ has timing flexibility in its expansion projects.

About half of APSEZ's cargo is sticky. This includes contractual take-or-pay cargo, cargo that is unlikely to be diverted to other ports due to infrastructure restrictions and cargo from joint-venture partners. 

"APSEZ's internal cash surplus is sufficient to cover its near-term operations and debt obligations as well as its budgeted capex," the ratings agency noted.

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The US-based short seller had accused the Gautam Adani-led group of ‘brazen stock manipulation and accounting fraud’. The lengthy report had also claimed that the company was using offshore shell companies to inflate stock prices. 

While Opposition leaders continue to issue calls for a probe into the matter, the conglomerate has vehemently denied all allegations. The Adani Group has dismissed Hindenburg's claims - calling them "malicious", "baseless" and a "calculated attack on India".

As part of the comeback strategy, the group has cancelled a ₹7,000 crore coal plant purchase as well as shelved plans to bid for stake in power trader PTC to conserve expenses. It has repaid some debt and pre-paid some of the finances raised by pledging promoter stake in group companies.

(With inputs from agencies)