CareEdge Ratings upgrades rating of Adani Green Energy Ltd to ‘AA/Stable’

CareEdge Ratings has upgraded Adani Green Energy Ltd’s (AGEL) rating from ‘AA-‘ to ‘AA/Stable’ due to its market leadership position, robust execution capabilities, and strong operational and financial profile, according to an official statement issued by the ratings agency.

The ‘Stable’ outlook on the long-term rating of AGEL reflects CareEdge Ratings’ opinion that the company will be able to scale up its operating portfolio by commissioning underlying projects within scheduled timelines. The outlook is supported by the presence of long-term power purchase agreements (PPAs), the statement noted.

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According to an official CareEdge Ratings statement, as of June 30, Adani Green Energy Ltd (AGEL) had an operational portfolio of 15.8 Gigawatt alternating current (GWac), comprising 70% solar, 13% wind, and 17% hybrid assets. In addition, the company has an under-construction portfolio of 15.1 GWac, targeted for development in the next 4 to 5 years, the agency statement noted.

The statement noted that AGEL’s strong execution track record has been demonstrated by its rapid scale-up of operations in recent years and its ability to develop projects in challenging locations, such as Khavda, Gujarat, where it currently operates 5.6 GWac power generation capacity. AGEL has a long-term vision to establish a cumulative capacity of 30 GWac in Khavda, going forward, the statement noted.

AGEL’s operational performance remains robust, supported by high plant and grid availability, generation exceeding design estimates, and a low collection period. These factors have translated into strong cash flows, healthy coverage indicators and a comfortable liquidity position, the statement noted.

The statement also mentioned the ongoing criminal indictment and civil complaint filed against the company’s board members by the US Department of Justice (US DoJ) and by the Securities and Exchange Commission (US SEC).

Adverse rulings against them could have negative implications on the AGEL’s financial flexibility, particularly its ability to raise debt and equity in domestic as well as international markets, and consequently, affect the group’s capex plans, the statement noted, adding that CareEdge Ratings would continue to monitor the situation and take appropriate steps based on events unfolding in the future.