Rating agency Moody’s has deemed the bribery charges against Gautam Adani, chairman of Adani Group, as credit negative for the conglomerate’s companies.
"The indictment of Adani Group's chairman and other senior officials on bribery charges is credit negative for the group’s companies. Our main focus when assessing Adani Group is on the ability of the group’s companies to access capital to meet their liquidity requirements and on its governance practices," Moody's Ratings said in a statement.
The Adani Group, one of India’s largest conglomerates, finds itself under renewed scrutiny after U.S. prosecutors charged Gautam Adani, the group’s chairman, with involvement in a $250 million (~Rs 2,100 crore) bribery scheme aimed at securing solar energy contracts in India.
The U.S. indictment, filed in Brooklyn, New York, accuses Gautam Adani and senior executives of orchestrating a scheme involving false statements to U.S. investors and violations of federal laws. Prosecutors allege that the group engaged in obstructing justice by tampering with evidence and misleading U.S. authorities, including the Department of Justice, the Securities and Exchange Commission (SEC), and the FBI. These accusations have sparked significant concern among international investors.
The controversy has adversely affected the Adani Group’s global financial instruments. Adani’s dollar-denominated bonds experienced a sharp decline following the announcement of the charges. Prominent global investors, including GQG Partners, have announced that they are closely monitoring the situation and reviewing their exposure to Adani Group companies to determine whether any actions are necessary.
The allegations come at a time when the group has been working to stabilise its financial position by reducing its debt burden. In March 2023, the Adani Group prepaid Rs 7,374 crore in share-backed financing and pledged to eliminate all such loans by the end of that month. This effort was aimed at addressing concerns over the group’s high leverage levels. Recent fundraising efforts include a $1 billion qualified institutional placement by Adani Energy Solutions in August 2024, which was intended to reduce debt and invest in power infrastructure.
In October 2024, Adani Enterprises raised $500 million through a share sale to finance new energy projects, establish a polyvinyl chloride (PVC) plant, and reduce airport unit debt. Additionally, the group has announced plans to raise at least $1.5 billion through dollar bond issuances under Adani Green Energy and Adani Energy Solutions by early 2025, primarily to refinance existing debt.
The Adani Group has maintained an aggressive acquisition strategy in recent months. One of the group’s major acquisitions was the Rs 3,204 crore purchase of a 46.64 percent stake in ITD Cementation India through its subsidiary Renew Exim. This acquisition included a mandatory open offer, which resulted in Adani securing a controlling stake in the company. Similarly, the group acquired CK Birla Group’s Orient Cement for Rs 8,100 crore. This transaction also involved a mandatory open offer, granting Adani majority control.
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