S&P upgrades Adani Int Container's credit profile, affirms 'BBB-' rating

Standard and Poor's (S&P) has upgraded the Adani International Container Terminals Pte Ltd's (AICTPL) preliminary standalone credit profile (SACP) from "bb+" to "bbb-". The company is expected to maintain a stronger-than-expected operating and financial performance.

S&P has affirmed the company's rating at 'BBB-' with a stable outlook.

AICTPL is a 50-50 joint venture between Adani Ports and Special Economic Zone Ltd and Terminal Investment Ltd (TIL). It works as a container terminal operator based in Mundra, Gujarat. It is at a prime location with favourable water depth compared with other nearby ports, besides broad rail and road connectivity to India's industrial hinterland.

“We expect AICTPL to maintain stronger credit metrics amid high growth in cargo volumes handled at the port, combined with lower-than-expected bond coupon” it said.

AICTPL saw significant throughput volume growth in financial year ended March 31, 2021, buoyed by strong global shipping activities during Covid-19. Cargo volumes (export and import) were up 33.7 per cent, while trans-shipment was up 71 per cent. This volume growth was also partially due to the operational disruptions at nearby Jawaharlal Nehru Port.

Throughput volume trend remained strong in the first half of the financial year 2022 (up to September 30, 2021), with 10.9 per cent growth year on year. Due to a broad cargo variety from its catchment area, AICTPL's cargo volume is not particularly reliant on one product base, and therefore not significantly held back by production shortages.

The rating agency said the final bond coupon of three per cent was lower than initial assumption, leading to stronger metrics throughout the project life compared with its previous forecast.

"The stable outlook reflects our expectation that AICTPL will maintain a stable cash flow with fully market-based pricing and volume over the next 12-24 months," it said.