New Delhi: Moody’s Investor Services on Friday downgraded the ratings outlook of four Adani Group companies from ‘stable’ to ‘negative’.
These firms are: Adani Green Energy; Adani Green Energy Restricted Group, which includes some other entities of the group; Adani Transmission Step-One; and Adani Electricity Mumbai.
“These rating actions follow the significant and rapid decline in the market equity values of the Adani Group companies following the recent release of a report from a short-seller highlighting governance concerns in the Group,” Moody’s said, as per Mint.
According to the Financial Express, on Adani Green Energy’s outlook, the ratings agency said: “The negative outlook also factors in the company’s significant refinancing needs of around $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.”
Moody’s, however, has kept outlook and ratings stable on four other Adani Group companies, including Adani Ports and Special Economic Zone (APSEZ).
“Moody’s stable outlook reflects that APSEZ would continue to generate relatively steady cash flow over the next 12-18 months and would be able to realign its capital spending plans in the event of a liquidity squeeze,” the report said, as per FE.
Moody’s decision to downgrade some of the group companies comes after financial index provider MSCI cut the free-float status of four Adani firms: Adani Enterprises, Adani Total Gas, Adani Transmission, and ACC.
Earlier, S&P Global Ratings had also slashed its outlook on Adani Group to negative amid concerns over potential governance risks and funding challenges.
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The move comes after Hindenburg Research in its report accused Adani Group of accounting fraud and stock manipulation. It also accused the group of using offshore tax havens. The group has denied them all. The report and its aftermath wiped out $110 billion from Adani‘s listed stocks in slightly more than a week and forced it to shelve a Rs 20,000-crore share sale.
Meanwhile, it has come under the lens of Indian and global regulators.
The Securities and Exchange Board of India is probing Adani Group’s links to at least two Mauritius-based firms – Great International Tusker Fund and Ayushmat Ltd. – which participated as anchor investors in the conglomerate’s share sale process.
Under India’s capital and disclosure requirement rules, any entity related to a company’s founder or the founder group is ineligible to apply under the anchor investor category.
The Australian Securities and Investments Commission is examining whether the allegation against the group of using offshore tax havens necessitates any regulatory action, the Sydney Morning Herald had reported.