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On February 10, Moody’s Investors Service upheld the ratings of eight Adani Group firms, including Adani Green. Four Adani Group firms now have a negative outlook from a stable one, while the four other companies still have a stable outlook according to Moody’s.
This event coincides with the market collapse experienced by Adani Group following the publication of the contentious Hindenburg report.
Adani Transmission Step-One Limited (ATSOL), Adani Green Energy Limited (AGEL), Adani Green Energy Restricted Group (AGEL RG-1), which consists of Adani Green Energy (UP) Limited, Parampujya Solar Energy Private Limited, and Prayatna Developers Private Limited, and Adani Electricity Mumbai Limited (AEML), all had their Moody’s outlooks changed from stable to negative.
Adani Ports and Special Economic Zone Limited (APSEZ), Adani International Container Terminal Private Ltd (AICTPL), Adani Green Energy Restricted Group (AGEL RG-2) made up of Wardha Solar (Maharashtra) Private Limited, Kodangal Solar Parks Private Limited, and Adani Renewable Energy (Rj) Limited, and Adani Transmission Restricted Group 1 (ATL RG1) made up of Barmer Power Transmission Servicing are the four Adani Group companies whose ratings were maintained
“The affirmation of AGEL’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,” Moody’s explained in a statement explaining the ratings action.
The ratings agency claims that after considering AGEL’s “huge capital spending programme and dependency on sponsor support, potentially in the form of subordinated debt or shareholder loans, which will likely be less assured in the current environment,” the company’s outlook was altered to negative.
The statement said, “The negative outlook also takes into account the Company’s considerable refinancing needs of about $2.7 billion in the fiscal year ending March 2025 (fiscal 2025) and Limited headroom in its credit metrics to manage any Material increase in Funding Costs.”
Furthermore, the company’s strong market position as the largest port developer and operator by cargo volume in India, as well as its solid liquidity and financial profile, were taken into account. The ratings’ stable outlook indicates Moody’s estimate that APSEZ would maintain a comparatively constant cash flow over the following 12 to 18 months and would be able to adjust its capital spending plans in the event of a liquidity crunch.
The stable outlook on APSEZ, AICTPL, AGEL RG-2 and ATL RG1 also assumes that there will be “no material adverse effect from any potential regulatory or legal investigations or increase in related party transactions to provide funding support to other group entities”, Moody’s explained.