Adani Transmission Limited’s (ATL) proposed acquisition of Reliance Infrastructure Limited’s three operating transmission assets is unlikely to impact the rating on its debt facilities, says India Ratings and Research (Ind-Ra).

The three operating transmission assets proposed for acquisition benefit from the revenue sharing mechanism applicable for interstate assets, which is implemented by the Central Transmission Utility (Power Grid Corporation of India Limited). The acquisition would decrease the counterparty concentration in consolidated ATL’s assets, since Maharashtra based utilities contribute between 60% and 65% of ATL’s consolidated revenue presently. Ind-Ra would review the final terms of acquisitions and also any future investments. 

The rated debt under the obligor group is protected by a waterfall mechanism, whereby cash flows from the operating assets under Adani Transmission India and Maharashtra Eastern Grid Power Transmission Company are first available for servicing the rated debt before being invested in new projects or used for any other purpose, after complying with the defined financial covenants. 

ATL has signed a binding term sheet with Reliance Infrastructure for acquiring the assets and expects to complete the transactions by 1QFY18, subject to statutory and regulatory approvals. 

ATL’s outstanding ratings are as follows: 

-
 
INR35.8bn non-convertible debentures: ‘IND AA+’/Stable
- INR12bn commercial paper (outstanding INR9.25bn): ‘IND A1+’


For ATL’s detailed rating rationale, please click 
here.

SOLICITATION DISCLOSURES

Additional information is available at www.indiaratings.co.in.

 

Ratings are not a recommendation or suggestion, directly or indirectly, to you or any other person, to buy, sell, make or hold any investment, loan or security or to undertake any investment strategy with respect to any investment, loan or security or any issuer.

DISCLAIMER

ALL CREDIT RATINGS ASSIGNED BY INDIA RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTPS://WWW.INDIARATINGS.CO.IN/RATING-DEFINITIONS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE WWW.INDIARATINGS.CO.IN. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. INDIA RATINGS’ CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THIS SITE.

Applicable Criteria

  • Rating criteria not avaiable.

Analyst Names

  • Divya Charen C

    Senior Analyst
    India Ratings and Research Pvt Ltd 4th Floor, D South, TIDEL Park No 4, Rajiv Gandhi Salai, Taramani Chennai 600 113
    +91 44 43401710

    Siva Subramanian

    Director
    +91 44 43401704

    Media Relation

    Mihir Mukherjee

    Manager Corporate Communications and Investor Relations
    +91 22 40356121