Issuer Summary: Adani Transmission Step-One Limited / ADTIN

Date prepared: 2026-05-22
Issuer: Adani Transmission Step-One Limited
Ticker: ADTIN
Related group: Adani Energy Solutions Limited / Adani Group
Substantive credit exposure: Transmission-asset cash flows of the ATSOL Obligor Group
Covered bond: XS2080214864 / originally USD 500mn 4.25% Senior Secured Notes due 21 May 2036 (current principal outstanding unconfirmed)

1. Business Snapshot and Recent Developments

Adani Transmission Step-One Limited (“ATSOL”) should be analysed not as a regular unsecured operating-company bond issuer of Adani Energy Solutions Limited (“AESL”), but as a restricted-group issuer that ring-fences specific transmission assets. The ADTIN 2036 bond covered in this report was issued in November 2019 as USD 500mn of 4.25% senior secured notes due 21 May 2036. In the company’s compliance certificate as of end-September 2025, the notes are described as a 16.5-year amortising instrument with an original weighted-average life of 10.14 years. The current principal outstanding has not been confirmed in this report. This is not a conventional bullet maturity corporate bond. It should be assessed primarily on regulated and contracted cash flows from transmission assets, scheduled principal amortisation, DSCR, security, and account-control arrangements.

This point needs to be established at the outset. Looking only at the ticker or group name, investors may be inclined to think they are buying a regular corporate bond of Adani Transmission, now AESL. However, the credit analysis of the ADTIN 2036 notes centres not on AESL’s consolidated transmission, distribution and smart-metering businesses, but on the obligor group comprising ATSOL, Adani Transmission (India) Limited (“ATIL”) and Maharashtra Eastern Grid Power Transmission Company Limited (“MEGPTCL”). AESL is important in the context of parentage, sponsorship, operating platform and capital-market access, but the direct repayment source for the notes is the cash flow from the transmission assets within the ATSOL obligor group.

According to company materials, the ATSOL obligor group holds four existing transmission assets: the Mundra-Mohindergarh HVDC Line, the Mundra-Sami-Dehgam Line, the Tiroda-Warora Line and the Tiroda-Aurangabad Line. The first two are regulated by CERC, while the latter two are regulated by MERC. Company materials indicate licence expiry dates ranging from 2059 to 2063. The company also explains that, under the Electricity (Amendment) Rules, 2023, certain licences are deemed to be renewed unless revoked, and it therefore treats the licences for the relevant assets as being automatically extended. This supports the case for business continuity beyond the final maturity of the 2036 notes, but actual tariff recovery, payments from beneficiaries and the content of regulatory orders still need to be monitored on an ongoing basis.

The most useful recent direct source is the ATSOL obligor group compliance certificate prepared on 20 December 2025, with a calculation date of 30 September 2025. For the 12-month period from October 2024 to September 2025, the document reports consolidated EBITDA of INR 17,326mn, DSCR of 1.89x, FFO/net debt of 13.50% and FFO cash interest cover of 2.31x. Receivables at end-September 2025 were INR 6,142mn, with no balance over 180 days past due. The average availability of the transmission assets was also broadly in the 99% range across FY2025 and the first half of FY2026.

At the same time, the certificate only shows the combined USD bond balance for the 2026 and 2036 notes at USD 847.5mn, or INR 63,762mn, based on the hedged exchange rate. It does not disclose the current principal outstanding of the 2036 notes on a standalone basis. Since the investment subject is the 2036 notes, the current outstanding amount, scheduled amortisation profile, actual weighted-average remaining life, price, yield and spread are important for investment decisions. This report does not make definitive statements on these points based only on public information.

The refinancing of the 2026 maturity is also an important current development. The end-September 2025 certificate states that the ATSOL obligor group had a bullet bond issued in August 2016 with an original amount of USD 500mn and maturing in August 2026, as well as an amortising bond issued in November 2019 with an original amount of USD 500mn and a final maturity in May 2036. Subsequently, Apollo disclosed on 11 March 2026 that ATSOL Global IFSC Limited had issued USD 500mn of investment-grade senior secured private placement notes, with the proceeds mainly intended to refinance notes maturing in late 2026. This disclosure may reduce the maturity-concentration risk around the 2026 notes, but the completion of the refinancing, the collateral and ranking of the new notes relative to the existing 2036 notes, their treatment within the restricted group and the impact on covenants need to be confirmed through issuance documents or trustee materials.

AESL, the parent company, states that as of end-September 2025 it was one of India’s largest private-sector transmission companies, with 19,642 ckm of operational transmission lines and 7,063 ckm under construction. Its transmission, distribution and smart-metering businesses also continued to expand in the fiscal year ending March 2026. These factors are positive for ATSOL in terms of the sponsor platform used to operate and manage the assets. However, the first point in assessing the 2036 notes is not AESL’s growth plan, but whether the existing transmission assets in the ATSOL obligor group can support scheduled debt service. The starting point for this credit is not to conflate AESL’s consolidated growth with the debt-service capacity of the ATSOL 2036 notes.

2. Industry Position and Franchise Strength

ATSOL’s business profile differs from that of a company seeking to increase sales volumes in a competitive market. Transmission assets are not directly exposed to electricity prices, fuel prices or end-demand in the same way as generation companies or retail distribution companies. The core credit questions are whether the relevant transmission lines continue to operate as necessary grid infrastructure, whether regulated and contracted tariffs are collected, and whether that cash reaches debt service through the account waterfall.

The strength of a transmission business is most directly reflected in availability. According to ATSOL obligor group materials, the average availability of the four transmission lines has remained in the 99% range over time. In the first half of FY2026, availability was 99.57% in Q1 FY2026 and 99.46% in Q2 FY2026. When transmission-line availability exceeds the stipulated levels, the company is more likely to earn regulated revenues and incentives. Conversely, major outages, grid issues, inadequate maintenance, natural disasters or regulatory penalties would affect tariff recovery and DSCR.

For all four assets, company materials show licence periods extending beyond the final maturity of the 2036 notes. The company explains that under the Electricity (Amendment) Rules, 2023, licences are deemed to be renewed unless revoked. This supports the institutional basis for business continuity through the bond’s maturity. However, the existence of a licence is distinct from timely cash conversion of each year’s tariffs, past differences and receivables. In India’s power sector, time lags between recognised regulated income and actual cash collection, payment delays by beneficiaries, retrospective tariff adjustments and treatment of past revenue gaps can affect credit metrics.

It is also important not to confuse ATSOL’s franchise with AESL’s overall transmission portfolio. AESL is one of India’s largest private-sector transmission companies, with broad exposure to transmission lines, transformation capacity, smart meters and distribution. This indirectly supports ATSOL through operating know-how, maintenance systems, regulatory capabilities, procurement and capital-market access. However, the cash flow directly available to investors in the ADTIN 2036 notes is not the revenue from AESL’s new transmission projects or smart-metering business. Even if the growth businesses perform well, the credit view on the 2036 notes could weaken if the ATSOL obligor group’s DSCR, receivables, DSRA, debt balance or distribution restrictions deteriorate.

India’s transmission business has structural demand support from renewable-energy expansion, interstate grid reinforcement and rising power demand. At the same time, regulated income depends on policy and regulators, and only becomes cash when capex approvals, tariff orders, recovery of past differences and payments from beneficiaries align. ATSOL’s assets are already operational, so new-construction risk is limited, but ongoing regulatory, collection, maintenance and hedging risks remain. The franchise assessment should therefore not be “AESL is large, so the credit is strong”; it should be based on whether the four relevant assets can maintain high availability over the long term and convert regulated revenue into cash.

3. Segment Assessment

For the ATSOL obligor group, segment assessment should focus less on product-line revenue or regional profit, as in a regular operating company, and more on which legal entity owns which transmission assets and which assets bear which regulatory, tariff and availability risks. Company materials indicate that ATIL holds three lines — Mundra-Mohindergarh, Mundra-Sami-Dehgam and Tiroda-Warora — while MEGPTCL holds Tiroda-Aurangabad.

ATIL’s availability has generally stayed around 99% from FY2025 through the first half of FY2026. On a line-by-line basis, the Mundra-Mohindergarh HVDC line has a stipulated availability of 96.00% and achieved 99.86% in Q1 FY2026 and 98.54% in Q2 FY2026. Mundra-Sami-Dehgam has a stipulated level of 98.50%, versus actual availability of 99.83% in Q1 FY2026 and 99.78% in Q2 FY2026. Tiroda-Warora has a stipulated level of 99.00%, versus 98.92% in Q1 FY2026 and 99.91% in Q2 FY2026, meaning one line was slightly below its stipulated level in one quarter. The average is strong, but outages and maintenance at individual line level still need to be monitored.

MEGPTCL’s Tiroda-Aurangabad line reported availability of 99.50% to 99.95% across each quarter of FY2025 and the first half of FY2026. Its stipulated availability is 99.00%, and actual availability exceeded this level in each period. Company materials state that each line is entitled to receive incentives when availability exceeds the stipulated level. Availability is therefore not just an operating-quality metric; it is linked to revenue and DSCR.

However, high availability alone does not eliminate all credit risks. For transmission assets, availability, regulated tariffs, beneficiary payments, receivables, past revenue gaps and the account waterfall must function as a connected chain. The end-September 2025 certificate states that regulatory orders by the Maharashtra Electricity Regulatory Commission enabled realisation of a past revenue gap of INR 15bn across FY2024 and FY2025 for Maharashtra-based assets of MEGPTCL and ATIL. This is an important point for revenue recovery, but the timing of collection by beneficiary, accounting recognition, cash conversion and impact on DSCR calculations require further confirmation.

ATSOL’s asset mix is more diversified than a single-project credit, but remains concentrated in one country, one regulated sector, one sponsor and transmission infrastructure. Unlike a generation PPA project such as Paiton, fuel-price and generation-volume risks are not the direct core of the analysis. As transmission assets, the key credit factors are grid importance, availability, regulated revenue, receivables and licence continuity. Investors should not simplify the case as “safe because it is diversified across four assets”; they should track availability by asset and debt and collection by legal entity.

4. Financial Profile and Analysis

ATSOL obligor group financials should be read as the debt-service capacity of a restricted group, not as AESL’s consolidated financials. The end-September 2025 compliance certificate shows, for the calculation period from 1 October 2024 to 30 September 2025, net revenue of INR 19,606mn, consolidated EBITDA of INR 17,326mn and cash flow available for debt service of INR 17,602mn. Interest payments were INR 6,743mn, principal payments were INR 2,549mn, and total debt service was INR 9,292mn. This results in a calculated DSCR of 1.89x.

DSCR of 1.89x indicates that, as of end-September 2025, the obligor group was absorbing its current-period debt service and was clearly above 1.0x. However, this is a company-defined compliance metric at end-September 2025 and does not by itself prove safety through 2036 or the thickness of the cushion. In particular, the DSCR numerator is affected by opening cash balances and tax and interest adjustments, while the denominator includes group-wide debt service on both the 2026 and 2036 notes. The standalone amortisation schedule, current outstanding amount and WAL of the 2036 notes, as well as debt service after refinancing of the 2026 notes, need to be confirmed separately.

Looking at the trend in covenant metrics, the level declined materially after March 2024. Company materials explain that this decline reflected the removal of AESL itself from the obligor group, which meant that AESL treasury income previously included in FFO and EBITDA was no longer part of the calculation. This explanation is important. The movement should not be read simply as deterioration in DSCR from the 4x range to the 1x range; the change in calculation scope must be taken into account. At the same time, on a post-scope-change basis, DSCR has only improved from 1.72x to 1.89x, while FFO/net debt has improved from 11.01% to 13.50%. This looks less like a very thick cushion and more like a level that depends on transmission-asset stability and covenant management.

The ageing of receivables is important in assessing regulatory and beneficiary collection risk. Total receivables at end-September 2025 were INR 6,142mn, consisting of INR 4,218mn at 0-60 days, INR 530mn at 61-90 days, INR 496mn at 91-120 days, INR 898mn at 121-180 days, and zero over 180 days. The total increased from INR 5,679mn at end-March 2025, but the absence of receivables over 180 days is supportive. At the same time, the 121-180 day bucket stood at INR 898mn, so collections are not entirely short-cycle.

Receivables indicate the gap between accounting revenue and actual cash collection. In transmission businesses, even when regulated revenue has accrued, delayed payments from beneficiaries increase working capital and can pressure short-term borrowings or account balances. The end-September 2025 certificate shows that working capital loans increased from INR 4,432mn in September 2024 to INR 4,827mn in September 2025. The absence of long-aged receivables is reassuring, but the total amount, ageing profile and cash conversion of past revenue gaps under regulatory orders should continue to be monitored as leading indicators for DSCR and liquidity.

The financial conclusion is that, as of end-September 2025, the ATSOL obligor group showed cash flow sufficient to absorb scheduled debt service. However, the cushion depends on high availability, regulated revenue, receivable collections and account controls continuing to work without interruption. Without confirming the current outstanding amount of the 2036 notes, the scheduled amortisation profile, post-refinancing debt service for the 2026 notes, hedging cost and the next compliance certificate, it would be inappropriate to make a definitive statement on safety through 2036.

5. Structural Considerations for Bondholders

The most important issue in this case is which cash flows bondholders have access to. The ATSOL 2036 notes are senior secured notes, and company materials show that compliance certificates are submitted to noteholders of both the 2026 and 2036 notes under the Common Terms Deed and Amended and Restated Common Terms Deed. The addressees include IDBI Trusteeship Services Limited as Security Trustee and Madison Pacific Trust Limited as Note Trustee. This indicates the existence of protective features that are absent from regular unsecured corporate bonds. However, the legal effectiveness of these protections, the collateral package, creditor ranking, distribution restrictions and cure periods cannot be determined without reviewing the full Offering Circular and trust deed.

That said, investors should not overstate recoveries simply because the bond is secured. The value of transmission assets lies less in liquidation value from selling physical assets and more in the cash collection generated by licences, regulated tariffs, grid necessity, availability, beneficiary payments and business continuity. Enforcement would likely involve Indian law, regulatory approvals, licences, continued operation of the transmission assets, rights of other creditors and trustee instructions. For investors, the best protection is not collateral disposal, but normal-course transmission revenue flowing through the account waterfall to debt service.

The operating-account waterfall in the end-September 2025 certificate starts with net revenue of INR 19,606mn, deducts operating, maintenance and statutory costs of INR 3,904mn, and, after working-capital movements, shows cash flow before debt service of INR 21,016mn. It then reflects interest payments of INR 6,798mn, principal payments of INR 2,549mn, accrued interest, other adjustments, distributions during the period, capex and lease-liability payments, resulting in INR 117mn of cash available for the liquidity reserve account and distribution account. The certificate confirms that, as of the calculation date, no amount had been transferred to the distribution account and that no default existed.

This waterfall is an important protection for bondholders. In regular corporate bonds, the company’s overall cash is often relatively freely deployed at management’s discretion. In restricted-group infrastructure bonds, the order of revenue, operating costs, taxes, debt service, reserves and distributions is specified, and distributions may be restricted if certain covenants are not met. Investors should check not only whether distributions were permitted, but also whether DSCR, DSRA, receivables and debt-service capacity remained adequate after distributions.

A structural strength of the 2036 notes is their scheduled-amortisation feature. A bullet bond depends heavily on refinancing markets at final maturity, while an amortising bond reduces principal over time if the business performs as expected. This is an important conservative feature for project and infrastructure debt. Conversely, because the bond is amortising, cash collection, principal repayment, DSRA, hedging and the timing of regulated revenue gaps matter in each period. It is not sufficient that the bond be repayable in 2036; each scheduled principal instalment needs to be met on time.

The post-refinancing structure of the 2026 notes is a key item for the next review. According to Apollo’s disclosure, the USD 500mn private placement notes of ATSOL Global IFSC Limited are mainly intended to refinance notes maturing in late 2026. This may reduce the maturity-concentration risk around August 2026. However, for existing 2036 noteholders, the key questions are whether the new notes share the same collateral, whether they rank pari passu, how they are treated under additional-debt restrictions, and how they affect DSCR calculations and distribution capacity. This report treats the financing disclosed by Apollo as a positive development subject to unresolved issues, while leaving the impact on the 2036 notes’ contractual terms as an unverified item.

6. Capital Structure, Liquidity and Funding

The ATSOL obligor group’s capital structure is centred on foreign-currency USD bonds. The end-September 2025 certificate shows total debt of INR 68,589mn, consisting of INR 63,762mn of USD bonds and INR 4,827mn of other short-term debt. The USD bonds are shown as USD 847.5mn equivalent, converted at the hedged exchange rate of 75.23 under principal-only swaps / cross-currency swaps. This is a combined figure including the 2026 and 2036 notes, and is not the current principal outstanding of the 2036 notes on a standalone basis.

Cash is not large relative to total debt. This is not necessarily a defect for a project bond, but it means investors need to examine the DSRA, account balances, next debt-service payments, working capital and hedge collateral in detail. Cash and cash equivalents at end-September 2025 were INR 2,485mn, of which the DSRA was INR 999mn. The certificate explains that the liquidity reserve account is not required after the restructuring because ATIL, MEGPTCL and ATSOL have no capex over the next six months. This indicates a small near-term capex burden, but does not mean that major maintenance, accident restoration or regulatory asset upgrades will never be needed for the transmission lines.

Foreign-exchange risk is also important because the bonds are USD-denominated. Revenue is primarily rupee-denominated regulated and contracted income, while debt is USD-denominated. The certificate provides the hedged exchange rate under principal-only swaps / cross-currency swaps. If the hedges function as intended, direct FX volatility is mitigated, but investors should check hedge maturity, counterparties, collateral posting, hedge renewal costs and FX and interest-rate conditions at refinancing. Since the 2036 notes are long-dated, FX and interest-rate risks cannot be reviewed once and then ignored.

Funding access needs to be assessed from both the ATSOL standalone and AESL/Adani Group perspectives. The direct repayment source for ATSOL is the restricted-group assets, but for large maturity events such as the refinancing of the 2026 notes, group market access, the investor base, ratings and headline risk matter. Apollo’s March 2026 disclosure of a USD 500mn senior secured private placement is a financing mainly intended to refinance the 2026 notes, and may reduce near-term maturity risk. At the same time, without confirming the debt structure after the private placement, collateral sharing and relationship with the 2036 notes, the final impact on 2036 noteholders cannot be fully assessed.

In evaluating liquidity, investors need to distinguish between the existence of cash and the extent to which that cash is freely available. The DSRA is funding for debt-service protection and differs from ordinary unrestricted cash. Fixed deposits and investments may also be subject to collateral or project-account restrictions. The end-September 2025 calculation shows investments of INR 1,368mn, cash and cash equivalents of INR 117mn and fixed deposits of INR 1,000mn, for total cash and cash equivalents of INR 2,485mn. Investors should confirm how these funds can be used for the next debt-service payments, DSRA replenishment, distribution restrictions and hedging.

The capital-structure conclusion is that, as of end-September 2025, ATSOL was supported by high-availability transmission assets and DSCR of 1.89x, while also carrying a large debt amount, USD-denominated obligations, dependence on hedging, an unconfirmed post-refinancing structure for the 2026 notes and unconfirmed standalone outstanding amount of the 2036 notes. Investors in the 2036 notes should verify not only whether financials are stable, but also the post-refinancing debt-service schedule, hedges, current principal outstanding and collateral sharing.

7. Rating Agency View

ATSOL-related notes are positioned in the low investment-grade area by international ratings. AESL’s March 2026 results materials show Fitch BBB- / Stable, Moody’s Baa3 / Stable and S&P BBB- / Stable for ATSOL’s international bonds. AESL’s Q3 FY26 media release dated 22 January 2026 states that Moody’s affirmed the Baa3 senior secured ratings of AESL, AEML, ATSOL and others, and changed the outlook to Stable. These indicate a degree of stabilisation after the cautious stance prompted by Adani-related headlines in early 2025.

However, this report has not directly reviewed the latest full reports from Fitch, Moody’s or S&P. Therefore, it does not reconstruct from company materials and media releases how much emphasis the rating agencies place on DSCR, PLCR, FFO/net debt, parent support, governance risk or sovereign/country risk. Rating levels and outlooks are used as confirmed information, but upgrade and downgrade sensitivities and detailed assessment of contractual terms are treated as unverified.

The key point in reading the ratings is that the rating of the ATSOL notes is not a simple reflection of AESL’s consolidated credit profile. The ratings assess the transmission assets within the restricted group, regulated revenue, DSCR, security, scheduled amortisation and account controls, while also considering Adani Group-wide governance, legal headlines, capital-market access and India country risk. Ring-fencing does not eliminate group risk entirely, and group risk does not justify ignoring ATSOL’s transmission-asset cash flows.

The credit supports identified in this report are operational transmission assets with high availability, regulated revenue, scheduled amortisation of the 2036 notes, security and account controls, DSCR of 1.89x as of end-September 2025, and the disclosed financing mainly intended to refinance the 2026 notes. Constraints are foreign-currency debt, regulatory and collection risks in India’s power sector, Adani Group-wide headlines, insufficient public information on the standalone outstanding amount and detailed terms of the 2036 notes, and the lack of direct review of the full rating-agency reports. This is this report’s analysis and is not a quotation from, or reconstruction of, the full rating-agency reports.

8. Credit Positioning

The ADTIN 2036 notes should be positioned within Adani Group-related debt against AESL’s corporate bonds, AEML, AGEL restricted-group notes and individual infrastructure bonds such as AICTPL. However, this report has not confirmed current price, yield, spread, OAS, Z-spread, current outstanding amount or liquidity. It therefore does not make a buy, sell, cheap or rich assessment. The relative positioning here is limited to structure, repayment source, disclosure and nature of risk.

AEML bonds depend on regulated utility cash flows from Mumbai distribution and transmission. For AEML, key issues include customer base, RAB, low distribution losses, MERC tariff framework and foreign-currency bond refinancing. By contrast, ATSOL does not have distribution customers; its core issues are the availability of four transmission lines, regulated tariffs, receivables, DSCR and foreign-currency bond structure. Even though both are AESL-related, AEML should be analysed as an urban distribution business, while ATSOL should be analysed as a restricted group of transmission assets.

Compared with AGEL restricted-group notes, ATSOL’s key risks are not renewable-energy generation volume, PPA counterparties, solar irradiation, module degradation or state DISCOM payment delays. ATSOL’s central issues are transmission-line availability and recovery of regulated tariffs. For solar generation assets, output volume directly affects revenue; for transmission assets, keeping assets available is more important. Both are restricted-group bonds, but the entry point of risk is different.

Compared with a port or terminal project bond such as AICTPL, ATSOL is less directly dependent on demand volumes or cargo handled for specific customers. Regulated revenue from transmission assets is based on availability and the regulatory framework, so business-volume volatility is relatively low. On the other hand, dependence on regulatory and tariff orders, beneficiary collections and the payment capacity of the national and state power sector are constraints that differ from terminal debt.

Within Indian infrastructure debt, the strengths of the ADTIN 2036 notes are operational transmission assets, high availability, low investment-grade ratings, scheduled amortisation, and security and account controls. Constraints are Adani Group-related governance and capital-market-access risk, long-dated foreign-currency debt, insufficient public information on the standalone balance and amortisation profile of the 2036 notes, and the unconfirmed debt structure after refinancing of the 2026 notes. Investment decisions require separate comparison with other low investment-grade Asian infrastructure bonds, Indian utility and renewable restricted-group bonds, and other Adani-related notes, including current spread, remaining life, collateral, amortisation profile and disclosure frequency.

9. Key Credit Strengths and Constraints

The first credit support is that the relevant assets are existing transmission infrastructure with high availability. From FY2025 through the first half of FY2026, the ATSOL obligor group’s average availability remained in the 99% range. Because revenue is supported by the assets being available, rather than being directly tied to generation or sales volumes, stable availability is the foundation of debt service.

The second support is regulated and contracted revenue. The relevant assets are regulated by CERC or MERC, and company materials show licence periods extending beyond the final maturity of the 2036 notes. The company also states that recovery of past revenue gaps for Maharashtra-related assets has become possible, making the regulatory framework a basis for revenue recovery. However, regulation does not guarantee immediate cash collection. Beneficiary payments, retrospective tariff adjustments, past differences and receivables ageing still need to be monitored.

The third support is the restricted-group bond structure. The presence of security, a Security Trustee, a Note Trustee, an account waterfall, DSRA and covenant metrics indicates a protective structure not found in ordinary unsecured corporate bonds. However, the collateral package, pari passu relationships, cure periods, distribution restrictions and enforceability of security need to be confirmed through the full Offering Circular and trust deed. As of end-September 2025, DSCR was 1.89x, FFO/net debt was 13.50%, FFO cash interest was 2.31x, and no default was confirmed.

The fourth positive development is the disclosed financing mainly intended to refinance the 2026 notes. The originally USD 500mn bond maturing in August 2026 represented a near-term maturity risk as of September 2025. Based on Apollo’s March 2026 disclosure, the USD 500mn private placement notes issued by ATSOL Global IFSC Limited are mainly intended to refinance notes maturing in late 2026. This may also reduce liquidity and market-access concerns around the same restricted-group perimeter for holders of the 2036 notes. However, completion of actual repayment, collateral and ranking of the new notes, and impact on the 2036 notes require confirmation.

The largest constraint, however, is the ease with which investors can confuse parent-company support with the direct repayment source. AESL and Adani Group are important sponsors, but the legal repayment source for the 2036 notes is confined to the restricted group. It would be risky to rely on group size or growth plans without checking ATSOL’s DSCR, collateral, receivables and amortisation schedule.

The second constraint is Adani Group-wide headline risk. Even for ring-fenced debt, the sponsor name, governance, US and Indian authority-related investigations and litigation, capital-market access and investor sentiment can affect ratings, spreads and refinancing. This should be treated as market-access risk separate from the direct repayment source.

The third constraint is foreign-currency debt and hedging. Revenue is primarily rupee-denominated, while debt is USD-denominated. Hedges reduce the risk if they function as intended, but hedge cost, collateral posting, counterparties and renewal capacity must be monitored through 2036. Changes in interest-rate and FX conditions can affect refinancing and hedge renewal.

The fourth constraint is the granularity of public information. The end-September 2025 compliance certificate is useful, but the current principal outstanding of the 2036 notes, full amortisation schedule, current price, spread, trust deed provisions, collateral scope, change of control, events of default and relationship with new debt after refinancing of the 2026 notes have not been sufficiently confirmed. The information constraint itself is a due-diligence item before investing in the specific bond.

10. Downside Scenarios and Monitoring Triggers

The most realistic downside scenario is a combination of lower availability and delayed regulatory collection. Major transmission-line outages, equipment failures, inadequate maintenance, natural disasters or grid problems could reduce revenue or incentives. If these are combined with delayed payments by beneficiaries, slow cash conversion of past revenue gaps or adverse changes in regulatory orders, receivables would increase and short-term borrowings or the DSRA could come under pressure.

The second downside scenario is further deterioration in DSCR and FFO metrics from their lower post-scope-change levels. Since March 2024, covenant levels have declined because AESL was removed from the obligor group. DSCR had recovered to 1.89x as of end-September 2025, but if regulated revenue, receivables, debt service, hedging costs or distributions deteriorate, the metrics could move relatively quickly toward the low-1x range. In particular, the new debt-service schedule after refinancing of the 2026 notes needs to be confirmed.

The third downside scenario is deterioration in foreign-exchange, hedging and refinancing conditions. The disclosed financing mainly intended to refinance the 2026 notes is a positive development, but over the long term through 2036, USD bonds, rupee revenue, hedging, future additional debt, rising interest rates and Adani-related market access remain ongoing risks. Higher hedge costs or counterparty issues could pressure account liquidity before accounting revenue is affected.

The fourth downside scenario is a resurgence of Adani Group-wide governance and legal risk. Even if ATSOL’s transmission assets are ring-fenced, investors may at times treat Adani-related bonds as a group exposure. If rating agencies again take a stricter view of group governance or market access, spreads and refinancing terms may deteriorate even if ATSOL’s DSCR remains stable. This should be seen not as deterioration in the legal repayment source, but as deterioration in market access and investor sentiment.

The fifth downside scenario is one in which the security and account structure do not function as sufficient protection. Even for secured debt, investors should not assume that transmission assets can be sold immediately after a default to achieve full recovery. Regulatory approvals, licences, business continuity, trustee procedures and relationships with other creditors may all be involved. Investors should therefore avoid overstating recovery from security enforcement and treat normal-course cash collection and DSCR maintenance as the most important monitoring items.

Future monitoring items include the March 2026 or FY2026 ATSOL compliance certificate, the debt structure after refinancing of the 2026 notes, the current outstanding amount and scheduled amortisation profile of the 2036 notes, DSCR, FFO/net debt, FFO cash interest, receivables ageing, required and actual DSRA balances, availability, regulatory orders, recovery of past revenue gaps, hedge contracts and rating actions. In particular, if DSCR decline, emergence of receivables over 180 days, DSRA shortfall, additional debt burden after refinancing of the 2026 notes and deterioration in rating outlook occur at the same time, the credit view on the 2036 notes would need to be revisited promptly.

11. Credit View and Monitoring Focus

The ratings shown in company materials around the ADTIN 2036 notes are in the low investment-grade range, and this report’s public-information-based view is not materially distant from that area. Based on the end-September 2025 DSCR, availability, receivables ageing and the disclosed financing mainly intended to refinance the 2026 notes, the credit direction appears closer to stable than to sudden deterioration. However, because the current standalone balance of the 2036 notes, post-refinancing debt service, trust deed provisions, hedge details and ATSOL-specific metrics after end-March 2026 have not been confirmed, it should not be asserted that the credit level or direction is unlikely to change rapidly. The credit should be reassessed once the next certificate and post-refinancing structure are available.

Credit supports are the high availability of existing transmission assets, the company’s explanation that licence periods extend beyond the 2036 maturity, regulated and contracted revenues, DSCR of 1.89x at end-September 2025, no receivables over 180 days, and security, account control and DSRA arrangements. The disclosed financing mainly intended to refinance the 2026 notes is also a positive development, but completion of the refinancing and the impact of the new notes’ terms remain unconfirmed. These factors support analysing the ADTIN 2036 notes more as project-finance-style debt than as ordinary unsecured Adani Group corporate bonds.

Constraints are Adani Group-wide governance and market-access risk, foreign-currency debt and hedging, cash-collection lags in regulated revenue, unconfirmed post-refinancing debt structure for the 2026 notes, unconfirmed standalone balance and amortisation schedule of the 2036 notes, and lack of full rating-agency reports. In particular, it is important not to confuse comfort from the group name with the actual debt-service capacity of the restricted group. Investment decisions require separate confirmation of current spread, WAL, outstanding amount and comparison with similar infrastructure bonds; this report alone does not assess price attractiveness.

12. Short Summary & Conclusion

Adani Transmission Step-One Limited / ADTIN is not a regular AESL corporate bond, but a secured and amortising restricted-group bond dependent on the transmission-asset cash flows of ATIL and MEGPTCL. As of end-September 2025, high transmission-line availability, DSCR of 1.89x and zero receivables over 180 days support the credit. At the same time, the current standalone outstanding amount of the 2036 notes, amortisation schedule, post-refinancing debt structure, hedging and Adani Group-related market-access risk require continued monitoring. Investors should focus not on AESL consolidated metrics, but on the ATSOL obligor group’s DSCR, receivables, DSRA, regulated recovery, and security and account structure.

Sources

• Adani Energy Solutions, Investor Downloads, Compliance Certificates and Results Presentations, https://www.adanienergysolutions.com/investors/investor-downloads
• Adani Energy Solutions, Compliance Certificate - ATSOL Obligor Group, calculation date 2025-09-30, dated 2025-12-20, https://www.adanienergysolutions.com/-/media/project/transmission/investor/documents/compliance-certificates-latest/atsol_og_compliance-certificate_september-2025.pdf
• Adani Energy Solutions, Q4 FY26 results presentation, 2026-04-24, https://www.adanienergysolutions.com/-/media/project/transmission/investor/documents/new-results-presentations/aesl_q4fy26_results-presentation_vf1.pdf
• Adani Energy Solutions, Q3 and 9M FY26 media release, 2026-01-22, https://www.adanienergysolutions.com/newsroom/media-releases/aesl-delivers-strong-q3-and-9m-fy26-performance-across-the-board
• SGX, Listing Prospectus Form for U.S.$500,000,000 4.25% Senior Secured Notes due 2036, https://links.sgx.com/1.0.0/prospectus-circulars/35921
• Apollo, Apollo Provides $500 Million of Senior Secured Notes to Adani Energy Solutions Transmission Platform, 2026-03-11, https://ir.apollo.com/_assets/_a6c2df787c36a2db0d66ab5e79adcf7a/apollo/news/2026-03-11_Apollo_Provides_500_Million_of_Senior_Secured_611.pdf

Unverified / Pending

• Scheduled amortisation profile, collateral package, events of default, change of control, distribution restrictions and pari passu relationships of the 2036 notes based on the full 2019 Offering Circular / trust deed.
• Current principal outstanding, current price, yield, spread, WAL and liquidity of the 2036 notes on a standalone basis.
• Actual repayment of the 2026 notes after the March 2026 Apollo-related private placement, the post-refinancing debt-service schedule, and the collateral and ranking relationship between the new notes and the 2036 notes.
• March 2026 or FY2026 ATSOL obligor group direct compliance certificate.
• Latest full reports from Fitch, Moody’s and S&P, including rating sensitivities and upgrade/downgrade triggers.
• Hedge maturity, counterparties, collateral posting, termination costs and ability to maintain hedging through 2036.