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Credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has maintained a stable rating outlook for the overall infrastructure sector for FY24, on the back of the likelihood of a stable operating performance for majority of the projects, long-term revenue visibility under concession agreements and power purchase agreements, and expected improved cargo and traffic volumes.

Further, the rating agency maintained a negative rating outlook on wind power projects, while it has revised the rating outlook for airports and thermal assets to positive from stable, metro to stable from negative and annuity projects to stable from positive.

As per the report, growth in electricity demand leading to increasing utilisation of thermal assets and improving traffic volumes at airports and metros are positives. It said that adequate internal liquidity and timely payments from counterparties remain key monitorables, adding that the impact of rising interest rates also remains a key monitorable as it impacts overall coverages and return expectations.

Ind-Ra further said that capital market issuances are likely to slow down in light of rising interest rates, while refinancing requirements from completed projects are likely to grow. As per the agency, sponsors would focus on tenor elongation, refinancing to reduce interest rates post completion and sale of assets to churn equity.