Adani Transmission and Adani Ports and Special Economic Zone Limited (APSEZ) are exposed to higher contagion risks, which could affect financial flexibility, if not addressed properly, rating agency Fitch Ratings said in a report on Wednesday.
"The governance weaknesses at the sponsor level and other Adani group entities expose even the group's stable cash-generative corporate-like issuers, Adani Transmission and Adani Ports and Special Economic Zone, to higher contagion risks, which could affect financial flexibility, if not addressed properly. Our lower governance assessment now constrains their ratings at 'BBB-'," the release said.
Most Adani group stocks recovered some lost ground on Wednesday after a heavy sell-off a day earlier amid reports of the group's ability to service the debt levels.
“Despite the Adani Group's claim of “complete” repayment of $2.15 billion in share-backed debt, regulatory filings show that banks have not released a significant portion of the promoters' shares held as collateral, indicating that the debt has not been fully paid off,” said a report by The Ken.
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The company, on its part, sought to allay concerns and said that the claims made by The Ken were baseless. "Adani has completed full prepayment of margin linked share backed financing aggregating to $2.15 billion and all corresponding shares pledged for those facilities have been released," a company release said.
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Meanwhile, most of the senior debt at the Adani group’s rated Indian entities as of end-December 2022, Fitch said, is offshore and largely secured, with US dollar bonds that will mature only from mid-2024.
"The liquidity position at all rated entities or restricted groups would benefit from cash flow generation from January 2023 to March 2024, adding to the cash balances at end-December 2022," it added.
On Wednesday, stocks of Adani Ports and the flagship company Adani Enterprises climbed over 2 per cent each on the BSE to Rs 607 and Rs 1,634 levels, respectively. Adani Power, Adani Wilmar, NDTV, Ambuja Cements and ACC, too, traded in the green in morning deals with gains ranging between 0.7 per cent and 1.8 per cent.
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