ICRA assigned 'AA-' rating to the Rs 38 billion (enhanced from Rs 13 billion) non convertible debenture programme of Adani Ports and Special Economic Zone. 

ICRA also has ratings of AA- outstanding on the Rs 61.31 billion bank limits and A1+ on the Rs 12 billion Commercial Paper programme of APSEZL, the outlook on the long term rating is 'Stable'. 

For the purpose of arriving at the rating, ICRA has used a limited consolidation approach, under which guarantees extended to group ventures, proposed equity investments in the subsidiaries/SPV projects and commitments on cost over-run funding of the subsidiaries/ SPV projects have been considered; debt of the subsidiaries/SPV projects which is project recourse in nature has not been factored in.

The ratings continue to reflect the strong business profile of the company's flagship Mundra port which has emerged to become India's leading port in terms of total cargo handled (over 100 million tonnes in FY14) and has been consistently registering cargo growth at rates superior to the industry trend even in the midst of a challenging business and economic environment, driven by its favorable operating characteristics; diversified cargo profile and long term customer tie-ups. The ratings also factor in the robust profitability metrics and cash accruals of APSEZL and the upside potential to its cash flows from recently commissioned facilities at Mundra port. Further, being a non-major port entity, APSEZL enjoys flexibility in tariff determination as per the current regulatory regime. 

ICRA notes that the company's credit metrics remained moderate in the recent past owing to the large scale of its domestic capex programme including expansion activities at Mundra port and investments in pan India port projects. APSEZL's indirect exposure by way of a corporate guarantee to the group's Australian business continues. However, the Abbot Point Coal Terminal, Australia has initiated the process of refinancing its debt. The company has received an indemnity guarantee from the acquiring company, which mitigates the guarantee exposure.

ICRA believes the acquisition will strengthen the business risk profile of APSEZL by diversifying its Pan India presence, with a ready port asset having deep draft and good rail and road hinterland connectivity. Moreover, the port has recently obtained environmental and other clearances for expansion of capacity. APSEZL plans to increase DPCL's capacity to 100 MT per annum from the current 25 MT per annum in phases by diversifying to other types of cargo such as Crude Oil, LNG, Containers and break bulk cargo. ICRA however notes the capex plans, and funding thereof, for scaling upto 100 million tones have not yet been factored in while arriving at the ratings. Any significant funding support from APSEZL will be a rating sensitivity. 

Shares of the company declined Rs 9.9, or 4.2%, to settle at Rs 225.95. The total volume of shares traded was 624,814 at the BSE (Wednesday).