Fitch Revises Outlook on Adani Ports, Energy Units to Stable, Affirms Ratings at BBB-

Fitch Ratings on November 3 revised the outlook on Adani Ports & SEZ Ltd (APSEZ), Adani Energy Solutions Ltd (AESL) and Adani Electricity Mumbai Ltd (AEML) to Stable from Negative and affirmed all long-term ratings at BBB-.

It stated the contagion risk tied to earlier group controversies has eased and liquidity and funding access are adequate to support the credits in the near term.

The upgrade of the outlook reflects Fitch’s view that the Adani group entities have demonstrated diversified funding access and resilient operating cash flows despite the November 2024 US indictment that had previously driven negative sentiment.

Fitch also cited regulatory developments this year, including a September 2025 SEBI finding that removed a major disclosure-related overhang, and a pickup in capex in H1 FY26 as reasons to reduce the near-term downgrade risk.

APSEZ: Scale, Cash & Constrained Upside

Fitch highlighted APSEZ’s market position, India’s largest commercial port operator handling about 25% of seaborne cargo across 15 terminals, and said the company’s operational strength gives high cash-flow visibility.

The agency pointed to a cash balance of ₹170 billion (June 2025) and forecast a sustained ~55% EBITDA margin under its base case, with annual capex of ₹120–160 billion over the medium term. However, Fitch noted that any upgrade is capped by India’s sovereign “country ceiling” at BBB-, meaning APSEZ’s credit profile appears stronger than the current rating but cannot be upgraded while the ceiling remains unchanged.

AESL / AEML: Regulated Cash Flows & Managed Leverage

Fitch applied the same outlook revision to AESL and AEML, noting AESL’s access to ~$1.8bn+ of new funding since late-2024 and AEML’s steady earnings in Mumbai.

The agencies emphasized the regulated, availability-linked cash flows for T&D assets and expected AESL net leverage to rise to around 5.9x in FY26 (from 5.1x in FY25) as capex for smart-metering and transmission projects accelerates, but to decline thereafter under Fitch’s base case and remain below downgrade thresholds.

Key Rating Drivers

Fitch cited APSEZ’s tariff flexibility at many non-major ports, long take-or-pay contract terms (capacity-weighted ~15 years), and geographic diversification (east-coast now >40% of throughput) as credit supports.

It compared APSEZ with JSW Infrastructure and international peers such as Port of Melbourne, noting that India’s country ceiling limits scope for upgrades even where fundamentals are strong.

Fitch flagged the principal downside risks: material loss of funding access or financial flexibility, a renewed episode of group-level contagion or governance shock, or a sustained deterioration in gross debt/EBITDA well beyond the rating case (notably above 6.0x). For AESL/AEML, coverage ratios falling below 2.0x or leverage breaching specified thresholds would also prompt negative action.