Adani shares in red as Moody's downgrades outlook for seven group companies

The Adani Group faced another major setback Tuesday (Nov 26) as global ratings agency Moody's revised the outlook for seven of the group entities from ‘stable’ to 'negative'. The group companies that have been placed on the list are Adani Green Energy, Adani Ports, and Adani Transmission, among others. 

Earlier, another agency Fitch put two of the group companies—Adani Energy Solutions Limited (AESL) and Adani Electricity Mumbai Limited (AEML)—on the "Rating Watch Negative" list.

The negative ratings come hot on the heels of the group facing legal troubles in the United States. Last week, Gautam Adani, the chairman of the Adani Group, and other senior executives were indicted in the US in a bribery case. The US Securities and Exchange Commission (SEC) has also filed a civil case against the group.

Also read: Adani bribery case: US SEC has no jurisdiction to summon foreigners, says report

Following the move by Moody's, the stocks of Adani Green Energy, Adani Enterprises Ltd and Adani Energy Solutions crashed eight per cent during the day, after two days of resilience. Shares of Adani Ports & Special Economic Zone and Adani Total Gas Ltd also plunged by more than four per cent. Among the acquired companies, stocks of Ambuja Cements Ltd dropped about 2.75 per cent, while ACC Ltd and New Delhi Television (NDTV) were also faring in red.

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The downgrading by global agencies could complicate Adani’s plans for debt procurement and increase borrowing costs. The agencies have also flagged possible weaknesses in the governance of the groups.

Despite these setbacks, one of Adani’s largest investors, GQG Partners, has said they will hold on to holdings in the group and would refrain from selling its holdings. The group also said it was confident about the fundamentals of the Adani Group companies it has invested in.

(With inputs from agencies)