Mumbai: Rating company S&P cut rating outlook on two Adani Group companies – Adani Ports and Adani Electricity – to negative from stable as their access to funding could get tighter following Hindenburg Research’s allegations of corporate mis-governance.
“There is a risk that investor concerns about the group’s governance and disclosures are larger than we have currently factored into our ratings, or that new investigations and negative market sentiment may lead to increased cost of capital and reduce funding access for rated entities,” S&P said in a statement.
Bonds and stocks of Adani Group companies are sliding over the past week after Hindenburg said that the group had indulged in practices that inflated stock prices and it had violated rules. While the company had defended its practices, it pulled off a ₹20,000-crore share sale.
The rating company reaffirmed its issuer and issue ratings as their business fundamentals remained intact, short-term liquidity is adequate and debt maturities in the next 12 months are manageable, reflecting other analysts’ opinion.
“The negative outlook reflects the risk of a deterioration in the credit profile of
and Adani Electricity due to governance risks and funding challenges for the larger Adani Group,” said S&P.
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