Moody's maintains ratings of 8 Adani cos, changes outlook on 4 to negative

Moody’s Investors Service on Friday confirmed the ratings of eight Adani Group companies, but changed the outlook on four to ‘negative’ from ‘stable’, the rating agency said. It retained the ‘stable’ outlook for the other four firms.

Moody’s said Adani Green Energy’s (AGEL’s) Ba3 rating was affirmed, but outlook changed to ‘negative’ from ‘stable’. The Ba2 ratings of Adani Green Energy’s group firms – Adani Green Energy (UP), Parampujya Solar Energy, and Prayatna Developers – were also affirmed, but outlook changed to ‘negative’ from ‘stable’. Similar was the case with Adani Transmission Step-One’s Baa3 rating, which was affirmed, but its outlook was changed to ‘negative’ from ‘stable’.

The Baa3 rating of Mumbai electricity distributor, Adani Electricity Mumbai (AEML), too, was affirmed but outlook was changed to ‘negative’.

Moody’s affirmed Adani Ports and Special Economic Zone’s Baa3 rating and retained its outlook of ‘stable’. Adani International Container Terminal’s Baa3 rating was affirmed and outlook remains ‘stable’. Adani Green Energy group firms Wardha Solar (Maharashtra), Kodangal Solar Parks, and Adani Renewable Energy’s Ba1 ratings were also affirmed and outlook retained as ‘stable’.

Finally, Adani Transmission firms Barmer Power Transmission Service, Raipur-Rajnandgaon-Warora Transmission, Sipat Transmission, Thar Power Transmission Service, Hadoti Power Transmission Service and Chhattisgarh-WR Transmission had their Baa3 ratings affirmed and outlook maintained at ‘stable’, Moody’s said.

These actions follow the decline in the market equity values of Adani Group companies following the recent release of a report by US-based short-seller Hindenburg Research, highlighting governance concerns in the group, Moody’s said in a statement. The Adani group has denied the allegations. 

Moody’s also affirmed the rating and maintained a ‘stable’ outlook for APSEZ, AICTPL, AGEL.

The affirmation of APSEZ’s issuer ratings considers the company’s strong market position as the largest port developer and operator in India by cargo volume and its strong liquidity and financial profile. The ‘stable’ outlook reflects Moody’s expectation that it would continue to generate relatively steady cash flow over the next 12-18 months, the rating firm said.

The affirmation of AITCPL’s senior secured bond ratings considers the company’s strategic location and access to a large catchment area that generates strong origin-destination cargo demand, Moody’s said.

The affirmation of AGEL’s rating is because of the group’s predictable revenue and the group’s dependence on government entities for more than 70 per cent of the offtake from its power projects, the rating agency said.