No adverse impact on Adani Port credit profile post KPCL

Adani Ports and Special Economic Zone Ltd's proposed acquisition of 75 per cent equity stake in Krishnapatnam Port Company Ltd would not have any adverse impact on its credit profile, India Rating (Ind-Ra) has said.

Krishnapatnam Port Company is a key player in the eastern coast with a total capacity of 64 million metric tonnes per annum.

APSEZ would incur a cash outflow of about Rs 55 billion towards the acquisition, and add debts worth Rs 62 billion of the Krishnapatnam Port.

"Even after assuming absolute EBITDA remaining same at FY19 levels, pro-forma consolidated net leverage (net debt/EBITDA) of Adani Ports in the current fiscal and first half of FY21 is unlikely to increase beyond Ind-Ra's negative trigger," the rating agency said in a note.

Post the acquisition, Andani Port's market share of pan-India cargo volume would increase to 27 per cent from 22 per cent, it said.