Change in Fortunes? Moody's Upgrades Rating On Four Adani Group Entities

After a chaotic year in 2023, February 2024 has brought some good news for Adani Group. Moody's Investors Service has affirmed the ratings on eight Adani Group companies. It changed the outlook on four of the Group companies to stable from negative and maintained the stable outlook on the other four companies.

Outlook changed to stable from negative for Adani Green Energy Limited; outlook changed to stable from negative for Adani Green Energy Restricted Group (AGEL RG-1) comprising Adani Green Energy (UP) Limited, Parampujya Solar Energy Private Limited and Prayatna Developers Private Limited; outlook remains stable for Adani Green Energy Restricted Group (AGEL RG-2) comprising Wardha Solar (Maharashtra) Private Limited, Kodangal Solar Parks Private Limited and Adani Renewable Energy (Rj) Limited.

Change in outlook for Adani Transmission

Similarly, outlook changed to stable from negative for Adani Transmission Step-One Limited; outlook changed to stable from negative for Adani Electricity Mumbai Limited; outlook remains stable for Adani Energy Solutions Limited Restricted Group 1 (AESL RG1) comprising Barmer Power Transmission Service Limited, Raipur-Rajnandgaon-Warora Transmission Ltd, Sipat Transmission Limited, Thar Power Transmission Service Limited, Hadoti Power Transmission Service Limited and Chhattisgarh-WR Transmission Limited.

Stable outlook for port business

The outlook remains stable for Adani Ports and Special Economic Zone Limited (APSEZ) and Adani International Container Terminal Private Ltd.

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 from a short-seller highlighting 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 several debt transactions, including refinancing as well as obtaining new loan facilities, demonstrating its continued access to debt capital at a reasonable cost, Moody's said.

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, it added.

"Whilst an investigation by the Securities and Exchange Board of India (SEBI) - India's securities market regulator - 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," it further said.