Ratings of Adani group entities under continuous surveillance: CRISIL

Corporate governance, decline in fundraising capability under scanner

The rating agency CRISIL, the Indian arm of Standard and Poor’s (S&P), today said that it keeps all outstanding ratings, including that of Adani group entities under continuous surveillance.

Any adverse regulatory or government action in the wake of the research report, emerging issues around corporate governance will be key monitorable, CRISIL said in a late-night statement.

Also, it would keep an eye on any decline in the group's resource-raising capabilities from banks or the capital markets due to a continuing slide in share prices.

The rating agency has taken note of the Hindenburg Research report on the Adani group published on January 24, 2023 and the adverse impact on the share prices of the Adani group’s listed companies.

Most of the listed entities of the Adani group have faced heavy price erosion after the Hindenburg report alleged that the group was engaged in "a brazen stock manipulation and accounting fraud scheme." Hindenburg Research alleged that there was an 85 per cent downside in group stocks "purely on fundamental valuations".

CRISIL has ratings on the Adani group’s 23 infrastructure and financial sector-linked entities. These entities include ACC Ltd, Mumbai International Airport Ltd, Adani Power, Adani Road GRICL, Adani Capital and Adani Green Energy (UP) Ltd.

Ratings on these companies are largely driven by the strength of their businesses and financial profiles. This, inter alia, factors in the steadiness of their cash flows, the infrastructure nature of assets with long concession life and extent of cash flow cushions.

In certain cases, CRISIL also factors in additional flexibilities available to the entities on account of their association with and criticality to the larger Adani group, it added.