More trouble for Adani Group: Moody’s changes rating outlook on 7 Adani companies to negative

More trouble for Adani Group: Following the US bribery scandal, Moody’s Ratings announced on Tuesday its decision to revise the outlook from stable to negative for seven Adani Group companies, including Adani Green and Adani Ports.
“We have changed the outlook on all seven issuers to negative from stable,” Moody’s said.
The companies affected include two units each of Adani Green Energy and Adani Transmission, along with Adani Electricity Mumbai Ltd, Adani Ports and Special Economic Zone Limited (APSEZ), and Adani International Container Terminal.
According to an ET report, the rating actions were triggered by the US Attorney’s Office’s criminal indictment of Adani Green Energy Ltd’s (AGEL) chairman Gautam Adani and several senior executives, alongside civil charges filed by the US Securities and Exchange Commission (SEC), according to Moody’s.
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The agency indicated that Gautam Adani’s indictment would likely restrict the Adani Group’s funding access and result in increased capital expenses.
The assessment acknowledges potential governance weaknesses across rated Adani group entities and possible operational disruptions, including impacts on capital expenditure plans during ongoing legal proceedings.
Moody’s maintained its Ba1 ratings for Adani Green, and Baa3 ratings for Adani Transmission, Adani Electricity, Adani Ports, and Adani International Container Terminal.
“An upgrade of the ratings is unlikely in the near term, given the negative outlook on all seven issuers. However, we could change the rating outlooks to stable if legal proceedings conclude clearly with no material negative credit impact,” it said.
Simultaneously, Fitch Ratings has implemented negative rating actions on various Adani Group entities and bonds, placing them under review for potential downgrade.
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The review includes Adani Ports, North Queensland Export Terminal, and Mumbai International Airport. While Adani Green Energy’s restricted groups retain their ratings, there is heightened scrutiny regarding governance matters. Fitch noted concerns about funding accessibility and cost increases, though short-term liquidity remains adequate for most entities.
Fitch has placed Adani Energy Solutions Ltd, Adani Electricity Mumbai, and certain Adani Ports and Special Economic Zone rupee and dollar bonds on rating “watch negative”.
Additionally, Fitch has altered ratings on four Adani unit senior unsecured dollar bonds from stable to negative.
However, GQG Partners, Adani’s primary foreign investor, expressed continued confidence in the conglomerate yesterday, stating they would maintain their investment position.
“We believe this level of exposure is manageable, even given the volatility in Adani Group stocks,” GQG stated in a memo, emphasising that the invested companies’ fundamentals remain robust.