New Delhi: Moody’s Investors Service on Friday warned that the rout in Adani Group shares could hurt the conglomerate’s ability to raise capital, while its peer Fitch saw no immediate impact on its ratings.
Adani Group’s listed companies have lost over $100 billion in value in just over a week after short-seller Hindenburg Research’s scathing report flagged concerns about the ports-to-energy conglomerate’s debt levels and alleged stock manipulation, accounting fraud and the use of tax havens.
Adani Group has denied any wrongdoing and has threatened to sue Hindenburg.
“Given the significant and rapid decline in the market equity values of the Adani Group companies following the recent release of a short-seller report highlighting governance concerns, our immediate focus is primarily on assessing the rated entities’ overall financial flexibility, including their liquidity position and access to funding to support refinancing and ongoing growth initiatives,” Moody’s said in a statement.
Moody’s said its ratings for Adani Ports and Special Economic Zone Ltd, Adani Green Energy Ltd, and Adani Transmission Ltd are underpinned by their regulated infrastructure businesses with long-term sales contracts, or their strong operating cash flows and dominant market position.
“Nevertheless, these adverse developments are likely to reduce the group’s ability to raise capital to fund committed capex or refinance maturing debt over the next 1-2 years,” it added.
Separately, Fitch Ratings said it saw no immediate impact on rated Adani entities’ credit profiles.
“There is no immediate impact on the ratings of the Fitch-rated Adani entities and their securities following a short-seller report alleging malpractices at India’s Adani Group, and expects no material changes to its forecast cash flow,” it said.
There are also no near-term significant offshore bond maturities - earliest in June 2024 for Adani Ports and Special Economic Zone Ltd; December 2024 for Adani Green Energy Ltd Restricted Group 1 (AGEL RG1); and 2026 or beyond for all other entities - reducing refinancing risks and near-term liquidity risks.
“Our ongoing monitoring will be looking closely at any major changes to the rated entities’ access to financing or cost of financing on a long-term basis, unfavourable regulatory/legal developments or ESG-related matters that could affect credit profiles,”
Fitch said.