Moody’s changes ratings of seven Adani Group companies

New Delhi| Following recent allegations in a US court, Moody’s Ratings has announced a change in its approach for seven Adani Group companies. According to Moody’s, the stable outlook for these companies has been changed to negative. This downgrade has been done by Moody’s in view of the legal troubles related to Adani Green Energy Limited (AGEL) Chairman Gautam Adani and senior members of the group’s management. The U.S. Attorney’s Office has filed a criminal case against them, while the U.S. Securities and Exchange Commission (SEC) has filed a civil case against the group.

Moody’s said these developments could make it difficult for Adani Group to obtain financing and increase borrowing costs. The rating agency has also expressed concern about potential weaknesses in the group’s governance and the potential impact of its operations and future spending plans.

Adani Ports and Special Economic Zone Limited (APSEZ)
Adani International Container Terminal
Adani Electricity Mumbai Limited
Two units of Adani Green Energy
Two units of Adani Transmission

Despite these changes, Moody’s has confirmed holding a Ba1 rating on Adani Green Energy and a Baa3 rating on Adani Transmission, Adani Electricity, Adani Ports and Adani International Container Terminal. Moody’s said a rating upgrade is unlikely in the near future due to a negative outlook. However, the agency suggested that if legal proceedings are resolved without causing major damage to the group’s credibility, the approach could be stable.

Fitch Ratings has also taken a negative decision on the ratings of many organizations of Adani Group. Fitch has placed some rupee and dollar bonds of Adani Energy Solutions Limited, Adani Electricity Mumbai and Adani Ports and Special Economic Zone under “rating watch negative”.

Additionally, Fitch has downgraded the ratings of four senior unsecured dollar bonds issued by Adani units from stable to negative. Although the agency acknowledged stable short-term liquidity for most Adani Group entities, it raised concerns over difficult funding access and high borrowing costs.

Despite recent challenges, GQG Partners, one of Adani Group’s largest foreign investors, has reiterated its support for the group. In a memorandum, GQG said it would not sell its holdings, expressing confidence in the core principles of the Adani Group companies in which it has invested. The firm described the current level of risk as manageable, despite volatility in Adani Group shares.