Moody’s Investors Service on February 3 warned that the rout in Adani Group shares may damage the conglomerate’s potential to boost capital, whereas its peer Fitch noticed no speedy affect on its rankings.
Adani Group’s listed firms have misplaced greater than $100 billion in worth in simply over per week after short-seller Hindenburg Research’s scathing report flagged considerations concerning the ports-to-energy conglomerate’s debt ranges and alleged inventory manipulation, accounting fraud and using tax havens. Adani Group has denied any wrongdoing and has threatened to sue Hindenburg.
How a lot has the Adani group misplaced for the reason that Hindenburg report?
“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 mentioned in a press release.
Moody’s mentioned its rankings for Adani Ports and Special Economic Zone Limited, Adani Green Energy Limited and Adani Transmission Limited are underpinned by their regulated infrastructure companies with long-term gross sales contracts, or their robust working money flows and dominant market place.
“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 mentioned it noticed no speedy affect on rated Adani entities’ credit score 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 mentioned.
There are additionally no near-term vital offshore bond maturities – earliest in June 2024 for Adani Ports and Special Economic Zone Limited; December 2024 for Adani Green Energy Limited Restricted Group 1 (AGEL RG1); and 2026 or past for all different entities – lowering refinancing dangers and near-term liquidity dangers.
“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 mentioned.
As Adani-Hindenburg battle intensifies, inventory market rout hits $72 billion
Hindenburg Research printed a report on January 24, 2023, alleging numerous purported malpractices resulting in a downfall within the share and bond costs of assorted group entities regardless of the group publishing its response on January 30, 2023.
Fitch at present has rankings on eight entities/restricted teams throughout the Adani Group together with Adani Transmission Limited (ATL). “Related-party transactions at these entities outside of the normal course of business are also limited,” it mentioned.
Adani, 60, who was third richest man on the planet until a day earlier than Hindenburg got here out with its report on January 24, has slipped to seventeenth place, behind rival Mukesh Ambani.