Four Adani Group companies now have a negative outlook from a stable one, while the other four companies still have a stable outlook according to Moody’s.
Adani Green Energy Limited (AGEL), Adani Green Energy Restricted Group (AGEL RG-1), Adani Transmission Step-One Limited (ATSOL), and Adani Electricity Mumbai Limited are the four companies for whom the outlook has been changed to negative (AEML).
Adani Green Energy Limited (AGEL) is a subsidiary of the Indian conglomerate Adani Group. AGEL is one of the largest renewable energy companies in India and has a portfolio of solar and wind energy projects across the country.
AGEL aims to provide clean and sustainable energy solutions to meet India’s increasing energy demands.
Adani Green Energy Restricted Group (AGEL RG-1) is a subsidiary of AGEL and is focused on developing renewable energy projects in India.
The company has a target of achieving 25 GW of renewable energy capacity by 2025, making it one of the largest renewable energy companies in the world.
Adani Transmission Step-One Limited (ATSOL) is another subsidiary of the Adani Group and is focused on developing transmission infrastructure in India.
The company aims to provide efficient and reliable transmission services to support the growth of the power sector in India.
Adani Electricity Mumbai Limited (AEML) is a subsidiary of the Adani Group that provides electricity distribution services in Mumbai.
AEML is responsible for the distribution, supply, and billing of electricity to Mumbai’s citizens, and also manages the maintenance of the city’s electricity infrastructure.
The company is working to provide a reliable and efficient electricity supply to its customers in Mumbai.
According to a recent report from a short seller that highlighted governance issues in the Group, “these rating actions follow the significant and rapid decline in the market equity values of the Adani Group companies.”
The company’s extensive capital spending program and dependence on sponsor support—possibly in the form of subordinated debt or shareholder loans—which will likely be less certain in the current environment, are taken into account in the change in the outlook to negative for AGEL.
The company’s substantial refinancing needs, which are expected to total around $2.7 billion in the fiscal year ending in March 2025 (fiscal 2025), as well as the limited headroom in its credit metrics to handle a material increase in funding costs, all contribute to the negative outlook.
The $500 million in bonds due in December 2024 that are subject to refinancing risk are what caused the outlook on AGEL RG-1 to change to negative.
The innovative financing structure of AGEL RG-1 offers protection from any contagion risk from the larger Adani Group, according to Moody’s.
The $500 million in bonds due in December 2024 that are subject to refinancing risk are what caused the outlook on AGEL RG-1 to change to negative.
The innovative financing structure of AGEL RG-1 offers protection from any contagion risk from the larger Adani Group, according to Moody’s.
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An upgrade of the ratings is unlikely shortly, according to Moody’s, given the unfavorable outlook on AGEL, AGEL RG-1, ATSOL, and AEML.
But if the entities can show that they have access to the capital markets for their growth funding and refinancing needs, and if their management can successfully implement prompt and efficient countermeasures to preserve the companies’ credit metrics, such as a decrease in capital spending or financial leverage with support from the promoter, Moody’s may change the rating outlook to stable.
To add to the diversity of the Adani group:
The Adani Group is a conglomerate of companies based in India with interests in various industries such as ports, logistics, agribusiness, energy, real estate, defense, and aerospace. Some of the key companies within the Adani Group include:
Adani Ports and Special Economic Zone Limited (APSEZ) – One of India’s largest port operators and a leading player in the Indian port sector.
Adani Power Limited – One of the largest private thermal power producers in India.
Adani Gas Limited – A city gas distribution company that provides CNG and PNG to households and industrial customers.
Adani Enterprises Limited – The holding company of the Adani Group that is involved in several businesses, including agribusiness, energy, real estate, defense, and aerospace.
Adani Wilmar Limited – A leading player in the Indian edible oils industry.
Adani Logistics Limited – A logistics solutions provider that offers end-to-end supply chain solutions in India.
Adani Green Energy Limited (AGEL) – One of India’s largest renewable energy companies with a portfolio of solar and wind energy projects.
Adani Transmission Step-One Limited (ATSOL) – A subsidiary of the Adani Group focused on developing transmission infrastructure in India.
Adani Electricity Mumbai Limited (AEML) – A subsidiary of the Adani Group that provides electricity distribution services in Mumbai.
These are some of the major companies within the Adani Group, and the conglomerate continues to grow and expand its operations across various industries in India and around the world.
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