Adani stock plunge can hurt group’s ability to raise debt, warns Moody’s

The credit firm noted that adverse events may reduce the group's ability to refinance maturing debt over the next 1-2 years, while Fitch sees no immediate impact on its ratings.

The logo of the Adani Group is seen on the facade of its Corporate House on the outskirts of Ahmedabad | Reuters file photo

Credit ratings agency Moody’s warned on Friday that the recent sell-off in Adani group’s shares after a short-seller’s report could reduce the Indian conglomerate’s ability to raise capital, while its peer Fitch saw no immediate impact on its ratings.

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.

“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. We recognise that a portion of the capex is deferrable, and the rated entities do not have significant maturing debt until FY2025,” Moody’s said in a statement.

The agency said its ratings for Adani Ports and Special Economic Zone, Adani Green Energy and Adani Transmission were not changed.

Mumbai-listed shares of Adani’s firms have plunged since last week, and their market value has now more than halved to less than $100 billion.

Separately, Fitch Ratings said that it did not expect material changes to Adani Group’s cash flow forecast.

Fitch has ratings on eight entities within the Adani group, including Adani Transmission Ltd, Adani Electricity Mumbai Ltd and Adani International Container Terminal.

“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,” the ratings agency said in a report.

Fitch added there were no significant offshore bonds maturing in the near term, reducing refinancing risks and near-term liquidity risks.

(Reporting by Akriti Sharma in Bengaluru and Tanvi Mehta in New Delhi; Editing by Rashmi Aich)

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