Ratings on all Adani Group entities under 'continuous surveillance': CRISIL

Taking note of the massive report issued by US-based whistleblower Hindenburg Research on the Adani Group and the consequent crash in stock prices, CRISIL Ratings said that it is keeping all its outstanding ratings on the group entities under “continuous surveillance”.

“Any adverse regulatory/government action in the wake of the research report, emerging issues around corporate governance, or a decline in the group’s resource raising capabilities from banks or capital markets because of a continuing slide in share prices will be key monitorable,” the rating agency said.

Currently, the rating agency has assigned ratings to 23 infrastructure and financial sector-linked entities of the Adani Group. These include Mumbai International Airport, ACC, Ambuja Cements, Adani Green Energy, Adani Power, Adani Airport Holdings, Adani Capital Private Limited, Adani Housing Finance Private Limited, among others.

Ratings on these companies are largely driven by the strength of their businesses and financial profiles, which factors in steady cash flows and extent of cash flow cushions, among others, the ratings agency said.

Since January 25, Adani Enterprises’ share value has more than halved, and that of Adani Ports and Special Economic Zone has shed more than 39%. Today, Adani Enterprises shares ended 27% lower in the cash market at Rs 1,565.25, and those of Adani Ports settled 7% down at Rs 462.45.

The massive sell-off in Adani Group stocks was triggered by allegations of misgovernance and stock price manipulation by Hindenburg Research.

Despite these allegations, which came just ahead of Adani Enterprises’ mega follow-on public offer, the secondary share sale managed to sail through.

But the negative report by Hindenburg triggered a chain effect and forced the conglomerate to withdraw the FPO.

The sell-off in stocks got aggravated after foreign banks Citigroup and Credit Suisse stopped accepting Adani Group companies’ bonds as collateral for margin loans.

SEBI is said to be examining the crash in the shares of Adani Group companies to look into any possible irregularities in the FPO. According to reports, the Reserve Bank of India (RBI) has also sought details from banks on their exposure to Adani Group companies, most of which are highly leveraged.

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