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MUMBAI: Moody’s Investor Service has revised the outlook on four Adani Group companies from stable to negative while maintaining the stable outlook on the other four companies. The rating factors in the reduced access to international funding keeping in mind their capital requirement.
The four companies where the outlook has been revised to negative are Adani Green Energy Limited (AGEL), which has a current rating of Ba3, AGEL Restricted Group-1 (Ba2), Adani Transmission Step-One (Baa3), Adani Electricity Mumbai Limited (Baa3). The companies whose outlook has been revised to negative are part of Adani Green and Adani Transmission. AGEL Restricted Group I (one of the downgraded entities) comprise of three companies – Adani Green Energy (UP) Limited; Parampujya Solar Energy; Prayatna Developers.
The rating agency has revised the outlook because of reduced access to funding. Moody’s said the change in Adani Green’s outlook to negative considers the company’s extensive capital spending program and dependence on sponsor support, potentially in the form of subordinated debt or shareholder loans, which will likely be less certain in the current environment.
“The negative outlook on Adani Green also factors in the company’s significant refinancing needs of around $2.7 billion in fiscal year ending March 2025 (fiscal 2025) and limited headroom in its credit metrics to manage any material increase in funding costs,” Moody’s said.
Moody’s said that Adani Transmission has a negative outlook because of the modest headroom in the company’s credit profile relative to the minimum tolerance level under Moody’s base case scenario, which limits the group’s ability to withstand a material increase in funding cost or reduced funding access.
According to Moody, the Adani group companies with a negative outlook risk a downgrade if their cash flows decline if they face a sustained challenge in accessing finance. The outlook can be re-classified as stable if Adani demonstrates its ability to raise capital.
The four companies where the outlook has been revised to negative are Adani Green Energy Limited (AGEL), which has a current rating of Ba3, AGEL Restricted Group-1 (Ba2), Adani Transmission Step-One (Baa3), Adani Electricity Mumbai Limited (Baa3). The companies whose outlook has been revised to negative are part of Adani Green and Adani Transmission. AGEL Restricted Group I (one of the downgraded entities) comprise of three companies – Adani Green Energy (UP) Limited; Parampujya Solar Energy; Prayatna Developers.
The rating agency has revised the outlook because of reduced access to funding. Moody’s said the change in Adani Green’s outlook to negative considers the company’s extensive capital spending program and dependence on sponsor support, potentially in the form of subordinated debt or shareholder loans, which will likely be less certain in the current environment.
“The negative outlook on Adani Green also factors in the company’s significant refinancing needs of around $2.7 billion in fiscal year ending March 2025 (fiscal 2025) and limited headroom in its credit metrics to manage any material increase in funding costs,” Moody’s said.
Moody’s said that Adani Transmission has a negative outlook because of the modest headroom in the company’s credit profile relative to the minimum tolerance level under Moody’s base case scenario, which limits the group’s ability to withstand a material increase in funding cost or reduced funding access.
According to Moody, the Adani group companies with a negative outlook risk a downgrade if their cash flows decline if they face a sustained challenge in accessing finance. The outlook can be re-classified as stable if Adani demonstrates its ability to raise capital.
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