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Rating company Crisil Ltd has accused Adani Power Ltd of not providing the requisite information needed to conduct the rating exercise, while reaffirming its stable outlook and double B minus rating on Rs6,559 crore of the company’s credit facilities.
In a statement issued late on Thursday, Crisil said that it has been consistently following up with Adani Power for information through letters and emails, apart from telephonic communication.
Crisil had, through its letter dated 28 February, informed the company of the extant guidelines and requested cooperation. However, the issuer continues to be non-cooperative, it said.
“The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix ‘issuer not co-operating’,” it said, while adding that the ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. An Adani official, when contacted, said they were looking into the matter.
“Crisil has reaffirmed its rating on the bank facilities of APL at ‘CRISIL BB-/Stable’. The reaffirmation factors in the order of the Supreme Court in April 2017, disallowing relief in the form of compensatory tariff due to change in Indonesian coal regulations, leading to continued under-recoveries in APL’s revenue,” the rating company said in its statement.
The rating reflects adequate liquidity and financial flexibility for the rating category, and low offtake risks. These strengths are partially offset by an unviable tariff structure and weak financial risk profile, it added.
Adani Power posted a net loss of Rs4,960.53 crore for the fourth quarter ended March as compared to a profit of Rs1,012.19 crore in the corresponding quarter of the previous year.
A recent Supreme Court judgment turned down the company’s compensatory tariff proposal for the Mundra plant as a result of which the company had to write off about Rs3,620 in the quarter ended March. The company also faced a loss from operations to the tune of Rs900 crore for the fourth quarter as compared to a profit of Rs1,085 crore in the corresponding quarter last year.
With a stable outlook, Crisil said it believes Adani Power will continue to benefit from the support it receives from the promoter group.
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