Chennai: Global credit rating agency S&P Global Ratings on Friday said it has revised the rating outlook of Adani Electricity Mumbai Ltd and Adani Ports and Special Economic Zone Ltd to negative from stable.
"The negative outlook reflects the risk of a deterioration in the credit profile of Adani Ports and Adani Electricity Mumbai due to governance risks and funding challenges for the larger Adani Group," it said.
Referring Hindenburg Research, the rating agency said a short-seller report alleging significant governance issues for the Adani Group, many of which relate to disclosures and actions at the shareholder level, has triggered a sharp fall in Adani Group entities' equity and bond prices.
"There is a risk that investor concerns about the group's governance and disclosures are larger than it has currently factored in the ratings, or that new investigations and negative market sentiment may lead to increased cost of capital and reduce funding access for Adani Ports and Adani Electricity", S&P Global said.
According to the credit rating agency, it has affirmed issuer and issue ratings on the entities as their business fundamentals remain intact, short-term liquidity is adequate, and debt maturities in the next 12 months are manageable.
Meanwhile, Adani Group's shares that started falling on January 25 and even forced it to call off 20,000 cr worth FPO after Hindenburg Research accused the business tycoon of "manipulation" and "fraud" further tanked in the first session Friday but stabilised in second half after stock exchanges placed Adani Enterprises, Adani Ports and Ambuja Cements under the short-term additional surveillance measure (ASM) framework.
In a note issued on Friday, Moody's said the credit ratings for Adani Ports and Special Economic Zone Limited, Adani Green Energy Limited, and Adani Transmission Limited are underpinned by their regulated infrastructure businesses with long-term sales contracts, or their strong operating cash flows and dominant market position.
The global credit rating agency also warned that rapid decline in market value of the group company's shares will impact the group's ability to raise capital.
Hindenburg Research's scathing attack last week on the group has questioned its debt levels and use of tax havens, but Adani has called the report baseless and affirmed its financials are strong.
The five-year old research firm on the other hand said it has all evidence to prove the charges it has levelled against the Adani Group.
Meanwhile, Gautam Adani's ranking in the richest list has also dropped to less than 20.
For all the latest News, Opinions and Views, download ummid.com App.
Select Language To Read in Urdu, Hindi, Marathi or Arabic.
Citing Hindenburg, ICRA says some of Adani Group Projects discretionary, can be deferred
Also Read
