Mumbai: The Adani Green Energy Limited (AGEL) received a boost when India Ratings and Research (Ind-Ra) upgraded the company’s long-term issuer rating to ‘IND AA-‘ from ‘IND A+’ in view of its stable outlook.
Market analysts attribute the elevation in AGEL’s rating to robust operational performance, enhanced execution capabilities and improved financial health. The rating company underlined the company’s strategic move to earmark funds for the repayment of a $750 million bond and its collaboration with Total Energies SE to facilitate asset monetization while retaining consolidation benefits for the upgrade rating.
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Ind-Ra stated that AGEL’s financial performance has been improved considerably and its revenue rose to ₹92.2 billion in FY24 from ₹77.9 billion in FY23. “The EBITDA also saw a substantial increase, reaching ₹72.9 billion in FY24 from ₹49.3 billion the previous year. The EBITDA margin improved to 79% from 63%, and the net adjusted debt to EBITDA ratio moderated to 6.5x from 8.0x in FY23,” said a statement from the company.
Moreover, AGEL has expanded its operational capacity to 10.9 GW at the end of FY24 from 8.1 GW in FY23 and 5.4 GW in FY22. “This growth is underpinned by AGEL’s strong execution capabilities and a diversified portfolio that includes solar (68%), wind, and hybrid sources (32%). The company’s operational assets are performing at the optimum level, with plant load factors (PLFs) between P50-P75 levels, ensuring steady and reliable energy generation,” said an official.
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According to a media report, AGEL’s portfolio diversification also extended to its counterparties, with major entities like the Solar Energy Corporation of India Limited and NTPC Limited forming 72% of the portfolio, both rated ‘AA+’ and above. This strategic counterparty diversification reduces risk and enhances the reliability of cash flows.
The strategic equity infusion from promoters and Total Energies SE is said to be major factor for AGEL’s improved financial performance. The promoters have committed ₹70 billion over FY25-FY26 with a view to ensuring flow of funding for AGEL’s expansion plans. “Additionally, AGEL also defeated $750 million Holdco bonds due in September 2024 through asset monetisation ($300 million), promoter preferential allotment ($281 million), and reserve accounts ($169 million). This strategic debt management underscores AGEL’s capability to manage large-scale financial obligations effectively,” said a company officer.
