“We have changed the outlook on all seven issuers to negative from stable,” Moody’s said.
The affected entities are two units each of Adani Green Energy and Adani Transmission, Adani Electricity Mumbai Ltd, Adani Ports and Special Economic Zone Limited (APSEZ), and Adani International Container Terminal.
These rating actions follow the indictment of Adani Green Energy Ltd’s (AGEL) chairman Gautam Adani and several senior management team members by the US Attorney’s Office in a criminal case and the filing of charges by the US Securities and Exchange Commission (SEC) in a civil case, Moody’s said.
Billionaire Gautam Adani’s indictment, Moody’s said, will likely weaken Adani Group’s access to funding and increase its capital costs.
The rating action further recognizes the possibility of broader weaknesses in the governance structure across the rated Adani group entities as well as potential operational disruptions, including on their capital spending plans, while legal proceedings are going, it said.Moody’s has affirmed Ba1 ratings on Adani Green, and Baa3 ratings on Adani Transmission, Adani Electricity, Adani Ports, and Adani International Container Terminal.”An upgrade of the ratings is unlikely in the near term, given the negative outlook on all seven issuers. However, we could change the rating outlooks to stable if legal proceedings conclude clearly with no material negative credit impact,” it said.
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In the meantime, ratings agency Fitch has taken negative rating actions on several Adani Group entities and bonds, putting them on watch for a possible downgrade.
Adani Ports, North Queensland Export Terminal, and Mumbai International Airport are among those under review for possible downgrades, while Adani Green Energy’s restricted groups have maintained their ratings but with increased caution over potential governance issues. Fitch highlighted the possibility of tighter funding access and higher costs, though short-term liquidity remains stable for most entities.
Adani Energy Solutions Ltd, Adani Electricity Mumbai, and some of Adani Ports and Special Economic Zone rupee and dollar bonds have been placed on rating “watch negative”, the rating agency said.
Meanwhile, Fitch has also downgraded ratings on four Adani unit senior unsecured dollar bonds from stable to negative.
However, earlier in the week, Adani’s biggest foreign backer GQG Partners reposed faith in the conglomerate saying that will not sell their holdings.
“We believe this level of exposure is manageable, even given the volatility in Adani Group stocks,” GQG said in a memo, adding that the fundamentals of the companies the boutique investment firm is invested in remain sound.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
