Chennai: Credit rating agency S&P Global Ratings on Thursday placed its ESG (environment, social and governance) Evaluation for India-based Adani Transmission Ltd. (ATL) under review.
This follows recent allegations of significant governance issues at the Adani group of companies.
"We aim to complete our review of the ESG Evaluation in the coming months. We will assess the implications of the allegations on our ESG Evaluation," S&P Global said.
On January 24, 2023, Hindenburg Research, a short-seller, in its report claimed there are significant governance issues for the Adani group. Many allegations relate to disclosures and actions at the shareholder level. Since then, equity and bond prices have plummeted for the group's entities- almost 50%, including for ATL, the credit rating agency said.
"We will closely monitor developments, including any investigations by the Indian regulators and any additional disclosures by the Adani group. The allegations related to group governance and disclosures may affect the appetite of fund providers and business partners in supporting ATL's growth. This may raise financial and operational risks for the company," S&P Global said.
"Our current assessment of ATL's governance factors in some controlling shareholder's weight in decision-making, including on related-party transactions. Common parentage and name-sharing also expose ATL to reputational risks from the wider Adani group," the statement added.
ATL is the largest private power transmission and distribution company in India. The Adani family controls the company with a reported 75% stake, with the balance in free float.
In the fiscal year ended March 31, 2022, ATL operated 18,795 circuit kilometers of electric transmission lines.
The company had a total transformation capacity of 40,001 megavolt amperes. It owns a 500-megawatt coal-fired power plant.
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