Moody’s Investor Group on February 13 said it has changed the outlook on debt papers of four Adani Group companies to stable from negative, and maintained the stable outlook on the other four companies. It affirmed the ratings of all eight companies.
The companies for which rating outlook have been revised are Adani Green Energy Limited (AGEL), Adani Green Energy Restricted Group (AGEL RG-1), Adani Transmission Step-One Limited (ATSOL), and Adani Electricity Mumbai Limited (AEML)
Those for which rating outlook have been kept the same are Adani Green Energy Restricted Group (AGEL RG-2), Adani Energy Solutions Limited Restricted Group 1 (AESL RG1), Adani Ports and Special Economic Zone Limited (APSEZ) and Adani International Container Terminal Private Ltd (AICTPL).
The action comes after weeks of S&P upgrading credit outlook to 'stable' from 'negative' for Adani Ports and Adani Electricity.
In February 2023, Moody's revised the outlook on four rated Adani Group companies to negative reflecting concerns over their access to capital and a potential increase in capital costs following the release of a report by Hindenburg Research – a short seller.
The report highlighted concerns over the Adani Group's governance practices, which led to significant and rapid declines in the market value of the Adani Group companies securities.
“In the ensuing period, the Group has completed a number of debt transactions, including refinancing as well as obtaining new loan facilities, demonstrating its continued access to debt capital at a reasonable cost. At the same time, several high profile equity transactions by large institutional and strategic investors, such as GQG and Qatar Investment Authority, also demonstrated the Group's continued equity market access,” said Moody’s.
The ratings agency said while investigation by Securities and Exchange Board of India (SEBI) is still ongoing, the Supreme Court's decision to entrust SEBI to complete the investigation on the Adani Group and the court's view that there is no apparent regulatory failure attributable to SEBI have curbed the potential tail risk in a downside scenario.
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