S&P affirms DIAL B-minus rating, outlook positive

Singapore, May 4 : S&P Global Ratings has affirmed a B-minus rating on Delhi International Airport Ltd (DIAL) with a positive outlook on improving cash flow prospects.
It said DIAL funds from operations cash interest coverage could recover by fiscal 2023. The view is based on its receipt of long-delayed regulatory approval for commercial property development (CPD), extension of the CPD contract with Bharti Realty Ltd till end-June and passenger traffic recovery.
DIAL now has adequate liquidity following the refinancing of its February 2022 senior secured bonds with a recent notes issuance large enough to fund capital expenditure, and deferral of Airport Authority of India's (AAI) concession fees, said S&P.
On April 28, S&P Global Ratings affirmed its B-minus long-term issuer credit rating on DIAL and long-term issue rating on the company's senior secured notes.
At the same time, it removed all the ratings from CreditWatch where it had placed them with negative implications on March 20 last year.
"The positive outlook indicates that we may raise the rating over the next 12 months if receipt of CPD income and passenger traffic volumes support DIAL's funds from operations cash interest coverage to improve over fiscals 2023 and 2024," said S&P.
DIAL can sufficiently manage its liquidity needs amid a weak operating environment, it added.