Moody’s Investors Service on Friday said it has changed the outlook on four Adani group issuers to negative from stable, while maintaining the stable outlook on other four companies. Net-net, it affirmed the ratings on eight Adani Group companies.
These rating actions, Moody’s said, follow the significant and rapid decline in the market equity values of the Adani Group companies following the recent release of a report from a short-seller highlighting governance concerns in the Group.
Moody’s changed the outlook for Adani Green to ‘negative’ from ‘stable’, while keeping its rating at Ba3 ratings. Moody’s said the affirmation of Adani Green’s senior secured bond rating reflects its predictable cash flow backed by long-term power purchase agreements (PPAs), its large and diversified portfolio of solar and wind generation projects, and its very high financial leverage.
“The change in the outlook to negative on Adani Green considers the company’s large capital spending program and dependence on sponsor support, potentially in the form of subordinated debt or shareholder loans, which will likely be less certain in the current environment. The negative outlook also factors in the company’s significant refinancing needs of around $2.7 billion in fiscal year ending March 2025 (fiscal 2025) and limited headroom in its credit metrics to manage any material increase in funding costs,” Moody’s said.
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