Fitch flags contagion risk for Adani group firms, cites weak governance

Fitch flags contagion risk for Adani group firms, cites weak governance

It stuck to a BBB- (stable) rating for the two Adani firms, until all concerns are addressed and resolved.

FPJ Web DeskUpdated: Wednesday, March 29, 2023, 09:57 PM IST
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After being stung by the Hindenburg report and accusations of fraud, the Adani Group lost as much as $140 billion and is yet to recover despite investments. It has tried everything from stake sales, to loan prepayments and a relentless PR push to reverse its fortunes, but investors and agencies remain concerned.

Even as Adani stocks rebounded after hitting red on Tuesday, ratings agency Fitch has flagged a risk of contagion at two group firms.

No upgrades till concerns are addressed

  • Citing governance issues at the parent group, Fitch warned of a risk to the financial flexibility of Adani Transmission and Adani Ports and SEZs.

  • It stuck to a BBB- (stable) rating for the two Adani firms, until all concerns are addressed and resolved.

  • This comes a month after Fitch said that its ratings of Adani haven't been affected at all by Hindenburg Research's allegations.

Airport at lower risk

  • At the same time, Mumbai Airport and Adani Electricity are at a lower risk of contagion, since they are backed by structural upgrades.

  • Over the past few days, Adani has also been hit by reports about renegotiating a debt for ACC and Ambuja Cement.

  • Another media report claiming that Adani hadn't repaid all share-backed loans, also hurt the group's position in the stock market.

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