Moody's Boosts Outlook for Adani Energy Firms Amidst Strategic Growth Plans

Moody's has upgraded the outlook for Adani Transmission and Adani Electricity Mumbai to stable, citing their solid access to liquidity and consistent credit profiles. The expectation is that both companies will maintain these standards over the next 12-18 months, amid considerable capital expenditure demands.

Moody's Ratings on Thursday upgraded the outlook for Adani Transmission Step-One Ltd (ATSOL) and Adani Electricity Mumbai Ltd (AEML) from negative to stable. The decision reflects expectations for robust liquidity access and credit profiles aligning with their Baa3 investment-grade ratings in the coming 12-18 months.

The ratings agency maintained the Baa3 senior secured ratings for both ATSOL and AEML, and upheld AEML's (P)Baa3 senior secured medium-term note program. This move highlights the anticipated maintenance of financial metrics supporting these ratings. ATSOL's standings are also bolstered by its connection to parent company Adani Energy Solutions Ltd (AESL), with linked credit assurances.

Moody's warns that unresolved US legal proceedings involving another Adani group entity's leadership could impact the broader group's capital access and growth capabilities. Ratings upgrades are unlikely without a sovereign rating boost, while potential downgrades could occur with prolonged credit metric decline or legal issues affecting liquidity.