Global rating agencies Moodys and S&P Global have revised their outlook on four Adani Group entities to stable, a year after revising it to
egative following an unverified report by US-based short seller Hindenburg Research.
The agencies changed their outlook to stable on Adani Ports and SEZ Limited, Adani Electricity Mumbai Limited, Adani Transmission Step One Limited, Adani Green Energy Limited, and Adani Green Energy Limited - RG1 as the financial metrics of these companies improved significantly in the past 12 months, says a company press release. Since February 2023, Moodys said the group completed several debt transactions, including refinancing as well as obtaining new loan facilities, demonstrating its continued access to debt capital at a reasonable cost.
"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 Groups continued equity market access," it read.
While an investigation by the Securities and Exchange Board of India (SEBI) is still ongoing, the Supreme Courts decision to entrust the markets regulator to complete the probe on the Adani Group and the courts view that there is no apparent regulatory failure attributable to SEBI have curbed the potential tail risk in a downside scenario, it read.
S&P Global, in its revised outlook, read, "We believe the conclusion of most regulatory investigations into the Adani Group without evidence of wrongdoing has reduced downside risk. Repayment of all promoter loans linked to share prices, equity, and bank loans raised by multiple group entities at competitive rates reflects restored access to funding. In our view, rated entities Adani Electricity Mumbai Ltd. (AEML) and Adani Ports and Special Economic Zone Ltd. (APSEZ) enjoy good competitive positions, healthy cash flows, and adequate liquidity to meet their debt-servicing requirements."
