S&P Global Raises Adani Ports Rating To BBB On Cash Flow Strength

Adani Ports and Special Economic Zone Ltd. (APSEZ) has received a positive credit rating upgrade from S&P Global Ratings, which raised its long-term issuer credit rating to “BBB” from “BBB-”. The agency cited the company’s strong operating cash flows, improving financial stability, and continued ability to fund large-scale expansion plans without significantly increasing its leverage. The outlook has been revised to stable, reflecting expectations of sustained financial discipline over the medium term.

S&P Global also upgraded the rating on APSEZ’s senior unsecured notes to “BBB”, reinforcing confidence in the company’s debt-servicing capability. The ratings agency expects Adani Ports to maintain a net debt-to-EBITDA ratio of around 2.6 times over the next 12 to 24 months, even as the company continues to pursue an ambitious capital expenditure cycle aimed at expanding its infrastructure footprint across India and overseas markets.

The company has set a long-term target of expanding its domestic port handling capacity to 1 billion metric tonnes by 2030, up from the current level of approximately 653 million metric tonnes. To support this growth trajectory, annual capital expenditure is projected to rise significantly, reaching around ₹180 billion in FY27 and FY28, and increasing further to ₹200 billion in FY29. This marks a notable jump from the company’s recent annual spending levels of about ₹130 billion.

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A major portion of the planned investment will be directed toward strengthening and expanding domestic port infrastructure, particularly container terminals. The remaining funds will be allocated to logistics networks, marine services, and select international expansion opportunities. S&P noted that this diversified investment approach is aimed at enhancing APSEZ’s integrated logistics capabilities and supporting long-term cargo growth across key trade routes.

The ratings agency highlighted that Adani Ports’ leverage has improved considerably in recent years, with net debt-to-EBITDA falling from nearly 4 times in FY23 to an expected level of around 2.6 times going forward. It also pointed out that the company’s management has adopted a tighter leverage policy, now targeting around 2.5 times, compared with its earlier tolerance range of 3.0 to 3.5 times, reflecting a more conservative financial approach.

S&P Global further expects APSEZ’s earnings growth to be driven by rising cargo volumes, supported by capacity expansion at ports such as Vizhinjam and Colombo, along with the full-year contribution from the recently acquired North Queensland Export Terminal in Australia. The stable outlook assumes continued strong cash flows, disciplined capital allocation, and no significant deviation from prudent financial management practices as the company executes its expansion strategy.

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