Inox Wind shares in focus after credit rating upgrade; stock down 21% YTD

Inox Wind Ltd, whose shares are down 21 per cent year-to-date (YTD), was in focus on Monday after the wind turbine generator maker said its long-term banking facilities rating was upgraded from ‘A+’ to ‘AA-’. While the company did not name the agency, it was likely Acuité Ratings, which on September 5 assigned a long-term rating of ‘ACUITE AA-’ and a short-term rating of ‘ACUITE A1+’ on Rs 335 crore bank facilities, with a ‘Stable’ outlook. Acuite also upgraded the long-term rating on Rs 15 crore bank loan facilities from ‘ACUITE A+’ to ‘ACUITE AA-’ and reaffirmed the short-term rating of ‘ACUITE A1+’ on Rs 351.5 crore facilities.

The rating ‘AA-’, Inox Wind said, indicates high safety and very low credit risk, signifying the Company’s strong financial position with a high degree of safety with respect to the timely servicing of financial obligations.

"Further, the company’s short-term banking facilities are already rated ‘A1+’, the highest rating for short-term bank facilities. This demonstrates the company’s strong financial position as the company utilises most of its banking facilities by way of letter of credits (LCs) and bank guarantees (BGs)," Inox Wind said.

Acuité Ratings in its September 5 note said the upgrade in the rating factors the established track record of operations, significant increase in unexecuted
order book to Rs 24,783 crore as on July 31, increased from Rs 22,433 crore as on March 31, improvement in scale of operations & profitability, strong financial risk profile by infusion of funds through right issue in FY26 of Rs 1,250 crore which further improved the liquidity profile of the group. 

"The infusion will be utilized to pay off the promoter's debt (Non Convertible Redeemable Preference Share) of Rs 560 crore. The fully participation of promoter in the right issue and infusion of funds which emphasis the promoter's contribution to the business," Acuité Ratings said.
The rating agency, however, believes the strengths are partly balanced by the intensive working capital operations resulting into higher GCA days and any volatility in raw material prices will remain a key sensitive factor.

Acuite said that the scheme of amalgamation of INOX Wind Energy Limited into INOX Wind Limited has been approved by NCLT, Chandigarh by order dated May 23. The effect of the merger is from 2023 onwards. The post merger effect had made positive impact of financials by reduction in the liability of promoter's debt (NCRPS).