This Midcap stock rose 7% on Wednesday within the first hour of markets opening after receiving a credit rating upgrade on its debt facilities.. The company has a market cap of Rs. 34,797 crore and is 2% away from its 52 week high, trading at Rs. 165.70 versus Rs. 157.30 at closing on Tuesday.
The stock saw volumes that are 0.2x yesterday’s volume trading 6% above its listing price. The company was listed yesterday, on October 3rd 2023.
In a filing dated 3rd October 2023, JSW Infrastructure Ltd (‘JSWIL”) stated that Moody’s vide their release dated October 03, 2023, has upgraded the Company’s corporate family rating (CFR) and senior secured notes rating to Ba1 from Ba2 and changed the outlook to stable from positive.
“The upgrade is driven by a combination of the substantial capital raised from JSWIL’s initial public offering (IPO) and the growth momentum of cargo volumes at both its existing and new ports. We expect JSWIL to continue its solid operating performance, with its credit metrics consistently within the Ba1 range,” says Erman Zhang, a Moody’s Analyst.
The stable rating outlook reflects Moody’s expectation that JSWIL will continue to achieve mid-to-high single digit growth as the throughput ramps up over the next 12-18 months, and that it will keep its capital spending within Moody’s expectations.
Moody’s could upgrade JSWIL’s ratings if the company’s FFO/debt rises above 25% on a sustained basis while at the same time, the company achieves material diversification in relation to both third party revenue and carbon-intensive cargo.
Conversely, Moody’s could downgrade JSWIL’s rating if (1) the company pursues an aggressive debt-funded capital spending program that introduces additional regulatory or cost overrun risks; and (2) its operational performance weakens due to ramp-up risks that lead to a lower-than-expected throughput growth. In particular, Moody’s would consider a downgrade if the company’s FFO/debt falls below 15% on a sustained basis.
Written by Sandeep R
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