Ratings agency Fitch has placed several Adani Group bonds under review for a potential downgrade following the indictment of key executives of the Indian conglomerate on bribery charges by US authorities. Adani Energy Solutions Ltd, Adani Electricity Mumbai, and certain rupee and dollar bonds of Adani Ports and Special Economic Zone have been marked as "watch negative", according to a Fitch statement. The agency also downgraded the ratings of four Adani subsidiary senior unsecured dollar bonds from stable to negative. Adani stocks continued to decline on Tuesday, with the group's market value dropping by approximately $33 billion since the indictment. Adani Green has suffered the most, losing around $9.7 billion, with its stock falling 7.5% on Tuesday. A "watch negative" status indicates a higher likelihood of a rating downgrade, which could impact the pricing of Adani's debt worth hundreds of millions of dollars. Fitch will closely monitor the US investigation for any implications on Adani's financial standing, particularly focusing on any significant deterioration in funding access, including the ability to renew existing credit lines or secure new facilities, and potential increases in credit spreads.
In response to the US indictments, rating agency S&P Global issued a downgrade warning for Adani Ports, Adani Green Energy, and Adani Electricity. Additionally, French oil giant TotalEnergies announced it would suspend financial contributions to its Adani Group investments in light of the recent indictment. US prosecutors have accused billionaire Gautam Adani, the group's founder, his nephew Sagar Adani, and six others of involvement in a $265-million bribery scheme to secure power supply deals. The Adani Group has vehemently denied the accusations, calling them "baseless", and has pledged to pursue all legal avenues. US authorities claim the bribes were intended to win contracts expected to generate $2 billion in profit over 20 years and to develop India's largest solar power plant. In a memo to clients, major Adani supporter GQG Partners attempted to reassure investors about its exposure to Adani. GQG noted that, except for Adani Green Energy Limited, the Adani Group does not currently need to raise additional capital. However, the investment firm cautioned that if additional financing were required, it could limit Adani's access to foreign capital. GQG also highlighted that any negative actions by the Indian government could significantly impact Adani, though it expects the Indian government to continue supporting Gautam Adani.
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