Moody's downgrades outlook for Adani firms
Moody’s Ratings announced a downgrade of its outlook for seven companies within Adani group.
The Adani Group is facing increased scrutiny as Moody’s Ratings announced a downgrade of its outlook for seven companies within the group. These include Adani Green Energy, Adani Ports, and Adani Transmission, among others. The outlook for these entities has been changed from stable to negative, according to Moody’s.
The downgrade comes in the wake of legal troubles involving Gautam Adani, the chairman of Adani Green Energy Ltd (AGEL), and senior members of the group’s management. The US Attorney’s Office has indicted them in a criminal case, while the US Securities and Exchange Commission (SEC) has filed a civil case against the group.
Moody’s stated that these developments could make it harder for the Adani Group to secure funding and may increase borrowing costs. The rating agency also expressed concerns over possible weaknesses in governance across the group and the potential impact on its operations and future spending plans.
Despite these outlook changes, Moody’s has affirmed the Ba1 ratings on Adani Green Energy and Baa3 ratings on Adani Transmission, Adani Electricity, Adani Ports, and Adani International Container Terminal.
Moody said that a rating upgrade is unlikely in the near future due to the negative outlook. However, it suggested that the outlook could return to stable if the legal proceedings are resolved without significant credit implications for the group.
Fitch Ratings has also taken negative actions on several Adani Group entities. Fitch placed bonds issued by Adani Energy Solutions Ltd, Adani Electricity Mumbai, and some rupee and dollar bonds of Adani Ports and Special Economic Zone under “rating watch negative.”
Additionally, Fitch downgraded the ratings of four senior unsecured dollar bonds issued by Adani units from stable to negative. While the agency acknowledged stable short-term liquidity for most Adani Group entities, it raised concerns about tighter funding access and higher borrowing costs. Despite recent challenges, GQG Partners, one of Adani’s largest foreign investors, has reiterated its support for the group.
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