Ahmedabad (Gujarat) [India], India Ratings and Research (Ind-Ra) has upgraded the long-term issuer rating of Adani Green Energy Limited (AGEL) to 'IND AA-' from 'IND A+'. The outlook is stable, reflecting the company's strong operating-performance, improved leverage metrics and strategic initiatives aimed at enhancing its financial stability and growth prospects. The upgrade takes into account AGEN's continued strong operating asset performance and anticipated large annual capacity growth in execution. Ratings of 4GW-5GW, up from the previous 2.5-3.5GW, also factor in healthy counterparty diversification and deleveraging in receivables, leading to better cash flows from operations. Ind-Ra's rating action includes several specific upgrades and affirmations.The long-term issuer rating was upgraded to 'IND AA-', and both fund-based and non-fund-based limits saw similar upgrades, notably, the size of the fund-based limit was reduced from R 5.15 billion to R 2.80 billion. , billion and non-fund-based limits were reduced from R105.05 billion to R97.25 billion, with AGEL's improved leverage being the key driver of the rating upgrade. The company has reduced its leverage from a historically high level of 9.0x to a more reasonable level (5.5-6.5x). This improvement is due to equity investments, asset monetization and better operating performance. AGEN has also changed its policy on determining the amount of money to be paid.A US$75 million Holdco bond is further strengthening its financial position. Another important factor is the creation of a platform within AGEN with Total Energy SE. This partnership allows partial asset monetization while retaining consolidation benefits. Equity investment by promoters through warrants, 25 per cent of which has already been received, and the company's ability to secure both debt and equity to ensure a fully funded under-construction portfolio also contribute to the positive rating. Action AGEN's operating cash flow remains strong, which supports its debt obligations and equity requirements for new projects.The company's strategy of using debentures and revolving manufacturing facilities ensures timely loan settlements for its special purpose vehicles (SPVs), thereby reducing funding risks. AGEN's operating capacity grew from 8.1GW in FY23 to 10.9GW at the end of FY24 and 5.4GW in FY22. The operating portfolio is diverse, with 72 per cent of counterparties rated 'AA+' and above, and 6 per cent rated as trading exposures. The composition of the portfolio is 68 percent solar, 13 percent wind and 2 percent hybrid. High DC ratio reduces variability in production and cash flows The company's good operating parameters are evident in its healthy Plant Loa Factor (PLF) and continued capacity growth, AGEN's consolidated EBITDA grew to Rs 73 billion in FY24, which That is more than Rs 5 billion.FY23. Run-rate EBITDA (excluding other income) was Rs 92 billion, up from Rs 35.1 billion in FY2020, indicating a strong financial performance supported by cash flows from operations, AGEN's liquidity and its access to capital markets. And strengthened by the company's revolving manufacturing facility. Flows from operations increased to Rs 77.1 billion during FY24, while its total project-specific debt stood at Rs 536 billion. Repayment of US$750 million of holdco bonds due in FY2015 has been reduced, putting AGEN under no immediate liquidity pressure. The construction portfolio of 11.4GW provides development visibility with risks managed through strategic land banks and soft module prices.The company's foreign exchange risk has been mitigated through 100 per cent hedging of interest and principal payments, reflecting prudent financial management.