"APSEZ's strong financial performance and flexibility in adjusting capital expenditure (capex) and dividends, and earnings contribution from Krishnapatnam will allow it to maintain its leverage within our rating threshold," the ratings agency said in a statement.
Adani Group's port developing arm had last week said that it will acquire 75 per cent stake in KPCL in a cash deal that values the port at Rs 13,500 crore.
S&P Global Ratings said that it expects APSEZ to maintain its ratio of funds from operations to debt at more than 15 per cent following the acquisition.
"APSEZ's leverage is likely to be about 15 per cent in fiscal 2021 (year ending March 2021) as a result of the acquisition, compared with our previous estimate of about 18 per cent.
"Leverage will then revert to 15-17 per cent in fiscal 2022 and beyond with higher operating cash flows and lower capex supporting deleveraging. We do not factor any improvement in margins of the acquired business or changes to APSEZ's dividends and capex plans," it said.