S&P Downgrades Outlook on Adani Units Following US Bribery Indictment

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S&P Global Ratings downgraded the outlook for three Adani Group companies to "negative" from "stable" on Friday, citing concerns over funding access after the U.S. indictment of the conglomerate's founder, Gautam Adani, on bribery charges.

 

Adani, along with seven others, was charged by U.S. prosecutors on Thursday for their involvement in a $265 million scheme to bribe Indian officials in order to secure power-supply deals. Adani Group has rejected the allegations made by U.S. federal prosecutors, as well as those in a parallel civil case by the U.S. Securities and Exchange Commission, calling them "baseless" and vowing to pursue all legal avenues.

 

The indictment could impact investor confidence in the broader Adani Group, as the founder is involved in several other companies within the conglomerate, which may lead to difficulties in securing funding and higher costs. According to S&P, Adani Group requires consistent access to equity and debt markets to support its significant growth plans and regular refinancing.

 

 The firm noted that domestic and international banks, as well as bond investors, tend to view the Adani companies as a collective group and might impose exposure limits on them.

 

S&P also revised the outlook on Adani Green Energy, the unit associated with the allegations, to "negative." Similarly, the outlook for Adani Electricity and Adani Ports was also downgraded to "negative." The ratings for these entities could be further reduced if the allegations are substantiated.

 

S&P noted that the group's cash flows are expected to be significantly impacted due to expected difficulties in accessing funding. Following the indictment, Adani Group's bonds and most of its stocks fell for a second consecutive day.

 

 

 

 

Paraphrasing text from "Reuters" all rights reserved by the original author.