No Ripples, Just Waves: Fitch Rates Adani Ports’ NQXT Leap as Credit Neutral

Adani Ports and Special Economic Zone (APSEZ) is making global headlines with its USD 2.4 billion deal to acquire Australia's North Queensland Export Terminal (NQXT), a move to further develop its Asia-Pacific presence. On a closely watched review, Fitch Ratings confirmed that this historical acquisition is "credit neutral" for APSEZ, reiterating its 'BBB-' rating with a negative outlook.

 

Key Highlights:

 

The transaction is framed as a non-cash transaction, where APSEZ issues 14.35 crore new equity shares to support the transaction, in effect maintaining liquidity for continued operations and future investment.

 

Fitch's credit-neutral approach is evidence of faith in APSEZ's strong business profile, operating scale, and healthy liquidity position. The agency points out that the underlying fundamentals of the company—such as being India's largest commercial port operator and possessing best-in-class operational efficiency—remain intact even after the acquisition.

 

The NQXT transaction is regarded as a strategic move towards port diversification in APSEZ's global port portfolio and connecting international trade links, especially within the Asia-Pacific region.

 

Fitch points out that APSEZ's operating cash flows and cash balance are adequate to repay upcoming debt maturities and capital spending, which will aid financial stability after the acquisition.

 

Although the negative outlook remains based on wider Adani Group governance risk and investigations, Fitch clarifies that the NQXT acquisition per se does not materially change APSEZ's credit metrics or risk profile.

 

This acquisition reinforces APSEZ's goal to be a global port giant, while Fitch's analysis indicates stability to investors with ongoing expansion.

 

Sources: ScanX, Upstox, Fitch Ratings