Moody’s cuts outlook for four Adani firms after market slump

Bloomberg

Moody’s Investors Service cut its outlook for Adani Green Energy Ltd and three other companies backed by Indian tycoon Gautam Adani, citing the plunge in the conglomerate’s stock market value in the wake of criticisms in a short-seller report.
Referring to factors such as concern over the impact of any big jump in funding costs, the agency lowered its view on Adani Green and Adani Electricity Mumbai Ltd to negative from stable, among other steps.
For Adani Green, the shift factors in refinancing needs of around $2.7 billion in the year ending March 2025, Moody’s said. For the electricity company, the adjustment reflects a “reduced ability to manage any material increase in funding costs given the limited headroom in its credit metrics.”
Adani Group’s financial health is under intense scrutiny after US-based Hindenburg Research accused it of malfeasance. Some of its bonds dropped to distressed levels, while more than $100 billion got wiped from the stock market value.
The conglomerate has repeatedly denied Hindenburg’s
allegations of wrongdoing and threatened legal action. Borrowing costs for Adani companies have surged in the wake of the report’s publication, with the yield on Adani Green’s 2024 dollar bond shooting up to 35%. It has since declined to 24%.
Adani honoured coupon payments US-currency bonds by their early February due date, and the billionaire himself said in a video that there was an “impeccable track record of fulfilling our debt obligations.”
Moody’s said it maintained its stable outlook on four companies in the group, including Adani International Container Terminal Private Ltd and Adani Ports and Special Economic Zone Ltd.
The stable view “assumes that there will be no material adverse effect from any potential regulatory or legal investigations or
increase in related party transactions to provide funding support to other group entities,” it said.