Fitch affirms JSW Infrastructure’s ratings at BB+

Fitch Ratings has reaffirmed JSW Infrastructure Limited’s (JSWIL) Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘BB+’, reflecting the company’s robust financial profile and strategic position in India’s growing port sector.

In addition, Fitch has affirmed JSWIL’s $400 million senior unsecured notes due 2029 at ‘BB+’ with a positive outlook. The bondholders benefit from equity pledges and guarantees from key operating subsidiaries.

The positive outlook is based on our expectation that JSWIL’s leverage (gross debt/EBITDA) will stay below Fitch’s upgrade threshold, despite the company’s expanded investment plan.

Following a successful IPO, JSWIL has announced plans to increase its capacity to 400 million tons per annum by the financial year ending March 2030 (FY30), from 170 million tons per annum currently.

This will require increased capital expenditure, estimated to be around 130 billion Indain rupee from FY25 to FY27.

Despite the higher capex, Fitch expects JSWIL’s leverage to remain under 3.5x over the next two years. However, exceeding these expectations could pressure leverage and narrow the company’s rating headroom.

Fitch’s forecasts include only committed capex and exclude certain greenfield projects that may require additional equity raising. JSWIL plans to raise fresh equity to fulfill regulatory listing requirements, which is not included in Fitch’s forecast.

The outlook is further supported by JSWIL’s expected maintenance of its third-party cargo mix at 40 per cent and the acquisition of Navkar Corporation Limited.

These factors will boost JSWIL’s third-party cash flow and expand its presence across the logistic value chain, according to the report.

JSWIL’s rating is influenced by its geographically diversified port locations, reasonable tariffs, and long-term take-or-pay contracts, which contribute to approximately 30 per cent of total revenue.

Attribution: Fitch Ratings report

Subediting: M. S. Salama