logo
logo
  • Home
  • About Tripura
    • Tripura
    • Governon
    • Chief Minister
    • Council of Ministers
  • Tripura
  • National
  • International
  • Lifestyle
  • Spotlight
  • Sports
  • Jobs/Tender
  • Photo Album

JP Morgan gives 'overweight' rating to Adani Group bonds

By IBNS
Dec 6, 2024 ..

Mumbai: US investment bank JP Morgan has assigned an 'overweight' rating to four bonds issued by the Adani Group, citing the group's capacity to scale and grow through internal cash flows, which reduces the likelihood of credit stress.


In its report, JP Morgan rated three bonds of Adani Ports & SEZ and one from Adani Electricity Mumbai Ltd (a subsidiary of Adani Energy Solutions Ltd) as 'overweight.' It maintained a neutral stance on five other Adani bonds and assigned an 'underweight' rating to a bond issued by Adani Green Energy Ltd.

JP Morgan categorizes its bond ratings into three groups: 'overweight,' equivalent to a buy recommendation; 'neutral,' akin to a hold recommendation; and 'underweight,' which is comparable to a sell recommendation.

Discussing potential risks, the report noted that Adani bonds might perform better than expected if there is a swift resolution of US SEC and Department of Justice allegations against founder-chairman Gautam Adani and key aides over bribery charges, successful refinancing of upcoming bonds and credit facilities, and improved operational performance.

The Adani Group has dismissed the charges as baseless.

Following initial volatility, "spreads of the group's bonds, (since action by US authorities), seem to have settled, widening by about 100-200 basis points, with short tenor seeing more spread widening due to higher dollar prices," JP Morgan stated.

The report also highlighted near-term offshore debt maturities across several Adani  entities, including Adani Ports, Adani Green, Adani Airport Holdings (fully owned by Adani Enterprises), Ambuja Cement bidco entities, and Adani Energy Solutions.

Regarding Adani Green, it noted, "Overall, we take varying degrees of comfort, and believe that key to watch among the bond-issuing entities are mainly Adani Green, which has a decent-size loan (USD 1.1 billion) due in March 2025."

Although the bonds are not secured by collateral, JP Morgan emphasized their robust cash flows.

"Our preference is for cashflows over security," remarked Love Sharma of JP Morgan in the report.

The ability of Adani Ports to scale and grow using internal cash flows provides "strong comfort on the intrinsic equity value of such a business, which in turn reduces the scope for credit stress," the report added.

Upside risks to JP Morgan's neutral rating include "a quick resolution of the SEC/DoJ charges; successful refinancing of the upcoming bonds and credit facilities; and improved operating performance," the report stated.

Conversely, downside risks to its 'overweight' and 'neutral' ratings include an adverse outcome from the SEC/DoJ cases, related-party transactions within the group, and debt-funded mergers or capital expenditure leading to weaker credit metrics.

Leave a Reply
Post comment
Related News
CRR cut, AI ethics push, and SORR benchmark: Experts hail RBI’s pragmatic policy moves
Dec 6, 2024 ..
LG Electronics files DRPH with SEBI; IPO size expected to be over RS 15,000 cr
Dec 6, 2024 ..
De-dollarisation not on India's agenda; derisking domestic trade is: RBI Governor Shaktikanta Das
Dec 6, 2024 ..
Vodafone Idea to consider Rs 2,000 crore equity raise on December 9, eyes tariff adjustments
Dec 6, 2024 ..
RBI keeps repo rate unchanged at 6.5%, slashes CRR to 4 percent
Dec 6, 2024 ..
Newsletter

Subscribe For Northeast Herald News And Receive Daily Updates

logo

Northeast Herald starts its journey from Tripura state capital city Agartala to cover the entire Northeast region of India for the latest news, news photos, and the latest photos to promote the great cultural, historical and traditional identity of the region.

  • Twitter Icon
  • About Tripura
  • About Northeast
  • National News
  • Tripura News
  • International
  • Entertainment
  • Spot Light
  • Article Us
  • Health
  • Lifestyle
  • Top News
  • Sports
  • About Us
  • Contact Us
  • Privacy Policy
  • Terms & Conditions
  • Disclaimer
  • Cookies Policy
  • Code of Ethic
  • Site Map
  • Rss Feeds

Copyright © Northeast Herald. All Rights Reserved