- Moody’s has lowered its outlook for Adani Transmission Step-One, Adani Electricity Mumbai and Adani Green Energy Restricted Group as well as Adani Green Energy to negative from stable.
- For Adani Green Energy, Moody’s said the downgrade has been changed to negative taking into account the company’s large capital expenditure program and its reliance on support from its sponsors.
- Moody’s has maintained its current outlook for four other Adani group companies including Adani Ports and Special Economic Zone and Adani International Container Terminal.
A man pushes a tricycle loaded with LPG cylinders on the road below the Adani signage in Mumbai. The allegation of fraud by US-based Hindenburg Research firm’s Adani Enterprise has sparked a political debate in India by opposition parties.
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Moody’s on Friday downgraded its outlook for four Adani group companies, citing “significant and sharp deterioration” in the market values of the entities, the rating agency said in a notice.
It also downgraded the outlook to negative from stable for Adani Transmission Step-One, Adani Electricity Mumbai and Adani Green Energy Restricted Group as well as Adani Green Energy – an entity comprising Adani Green Energy, Parampujya Solar Energy and Prayas Developers.
“These rating actions follow a significant and rapid decline in the market equity values of Adani group companies,” Moody’s said.
Without naming Hindenburg Research, the rating agency highlighted “the recent release of a short-seller report highlighting governance concerns at the group”.
The US short-seller accused the Indian group of stock manipulation and accounting fraud in a January 24 report, and Adani has denied those allegations.
Adani group companies have lost over $100 billion in market capitalization due to fall in shares since the Hindenburg report.
For Adani Green Energy, Moody’s said the downgrade has been changed to negative taking into account the company’s large capital expenditure program and its reliance on support from its sponsors.
Adani Green Energy’s support will likely come in the form of subordinated debt or shareholder debt, Moody’s described, adding that it would be “less certain in the current environment.”
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“The negative outlook also factors in the company’s significant refinancing requirements of approximately $2.7 billion in the fiscal year ending March 2025 and limited headroom in its credit metrics to manage any material increase in funding costs,” it said. .
Meanwhile, Moody’s maintained its stable outlook for four other Adani group companies including Adani Ports and Special Economic Zone and Adani International Container Terminal. Adani Green Energy Restricted Group and Adani Transmission Restricted Group were also on the list.
Moody’s latest revision comes after global index provider MSCI announced last week it would cut the weighting of Adani Enterprises, the group’s flagship company, and three other Adani group companies.
MSCI’s latest quarterly review, however, shows that none of Adani’s shares have been removed from its global indices.
Adani Enterprises is scheduled to present its third quarter report on Tuesday.
Source: www.cnbc.com
