Credit Rating Agencies Differ in Outlook of Adani Group Entities: What It Means

This comes after a market turmoil that wiped off $30 billion in market capitalisation of the conglomerate.

Gautam Adani.

(Photo: PTI)

Assessments of the credit profiles of Adani Group entities contained mixed results for the Gautam Adani-led conglomerate.

The latest: While Moody's said that the group's ability to raise capital has likely been impacted by "adverse developments," S&P lowered its gauge of two entities' (Adani Ports and Adani Electricity) abilities to raise capital.

Yes, but: Another global rating firm, Fitch Ratings, said that there's no immediate impact on the credit profile of the Adani Group companies it rates.

• Yields on bonds issued by Adani Group companies improved on Friday.

• The shares of Adani Enterprises, Adani Ports, and SEZ ended the day on a higher note, PTI reported.

Why it matters: The ratings assigned by these agencies are a measure of the creditworthiness of a corporation (or sovereign country); this further informs investors or prospective lenders.

Vote of confidence? Despite $30 billion being wiped out of the company's market capitalisation, a French oil and gas company called TotalEnergies said that it has not revalued its 37.4 percent stake in Adani Total Gas and 19.75 percent stake in Adani Green Energy.

Between the lines: These developments come after the US short-seller Hindenburg Research's report and five days of trading which reduced Gautam Adani's net worth by nearly $70 billion, as well as resulted in the withdrawal of Adani Enterprises' Rs 20,000-crore FPO.

• The conglomerate has denied all allegations and has sought to file a lawsuit against Hindenburg Research.

Up in arms: A probe by a joint parliamentary committee or a Supreme Court-monitored panel has been demanded by the Congress and other Opposition parties in India.

• "All the opposition parties unitedly want to discuss this [Adani Group issue] extremely important issue as it affects the citizens of this country [...] but the government doesn't want to discuss any issue that it thinks would embarrass it," Congress MP Shashi Tharoor was quoted as saying by PTI.

• Both Houses of Parliament ended up being adjourned on Friday.

What they're saying: Finance Secretary TV Somanathan chalked up the Adani Group crisis and the consequent market turmoil as a "storm in a teacup."

• "Both SBI and LIC have issued detailed statements… the Chairperson, the CMD has himself come out and explained how they are not overexposed… and also said, look, we are sitting over profits for the exposure… They have very clearly said their exposure is well within the permitted limits and they are even now – with the valuation falling as well – sitting over profit," Union Finance Minister Nirmala Sitharaman said in an interview with Network18.

• "The banking sector remains resilient and stable. Various parameters relating to capital adequacy, asset quality, liquidity, provision coverage and profitability are healthy," the Reserve Bank of India also chimed in.