Adani Group stocks plunge can dent debt raising ability, says Moody’s

Credit ratings agency Moody’s said in a statement that the recent sell-off in Adani Group’s shares after the Hindenburg Research report could dent the ports-to-power conglomerate’s ability to raise capital to fund capex or refinance maturing debt over the next 1-2 years. 

The Moody’s statement as accessed by news agency Reuters read, “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 that its ratings for Adani Ports and Special Economic Zone (APSEZ), Adani Green Energy, and Adani Transmission were not changed.  The Moody’s report comes after Fitch Ratings said there is no immediate impact on the Adani entities and their securities rated by Fitch. 

Fitch said, “There are also no near-term significant offshore bond maturities- earliest in June 2024 for Adani Ports and Special Economic Zone Limited (APSEZ, BBB-/Stable); December 2024 for Adani Green Energy Limited Restricted Group 1 (AGEL RG1, BB+/Stable); and 2026 or beyond for all other entities- reducing refinancing risks and near-term liquidity risks.”

It further said that it will continue to monitor any major changes to the rated entities’ access to financing or cost of financing on a long-term basis. Fitch stated, “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.”

It also said there were no big offshore bonds maturing in the near term, reducing refinancing risks and near-term liquidity risks. 

(With agency inputs)

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