Adani Ports to raise Rs 4,500 cr via long-term bonds

In the first half of 2015-16, Adani Ports and Special Economic Zone Ltd handled 76.1 million tonnes of cargo

Adani Ports and Special Economic Zone Ltd plans to raise Rs 4,500 crore through long-term debentures. The aim is to reduce short-term debt and finance projects, including those at Mundra in Gujarat.

Rating agency ICRA has assigned a long-term ‘AA+’ rating on the enhanced non-convertible debentures programme of the company from Rs 2,384 crore to Rs 6,884 crore. The outlook on the rating is 'stable’.

In the first half of 2015-16, at a consolidated level, the company handled 76.1 million tonnes of cargo and the operating income (OI) was Rs 3,591 crore, with net profit of Rs 1,283 crore. In 2014-15, it handled 144.3 mt cargo, with OI of Rs 6,152 crore and net profit of Rs 2,324 crore.

The group has seven operational port assets and has been consistently registering cargo growth at rates superior to the industry trend. Project risks are held to have been reduced after completion of projects and commencement of cargo handling at all planned capacity additions in the past 12 months.

Some of the projects completed are Mundra Port as well as ports and terminals at Mormugao and Kandla, and the Vizag Adani International Container Terminal. Two new operational entities are the Dhamra port and Vizag terminal on the eastern coast, adding to the strong presence on the western coast. Except Mormugao, Vizag and Kandla, the others are non-major ports, giving them leeway in setting rates.

The company has robust profitability metrics and large cash accruals, says the rating. Surplus funds have been loaned as interest bearing advances to subsidiaries, helping reduce funding costs at a consolidated level.

Debt could rise for planned capital expenditure but the financial profile is expected to improve steadily due to expected improvement in cash flow from the ramp-up of operations at the recently commissioned and operational ports.