S&P Global Ratings downgraded its outlook for three Adani Group entities to “negative” from “stable” on Friday, citing concerns over the conglomerate’s ability to access funding following the indictment of its founder, Gautam Adani, on bribery charges in the U.S.
On Thursday, U.S. prosecutors charged Adani and seven others, including his nephew Sagar, with fraud for their alleged involvement in a $265 million bribery scheme aimed at securing power-supply deals by influencing Indian officials.
Adani Group has strongly denied the allegations, calling them “baseless,” and stated it would pursue “all possible legal recourse” against the charges, which also include a parallel civil case brought by the U.S. Securities and Exchange Commission.
S&P expressed concerns that the indictment could undermine investor confidence in the broader Adani Group, where the founder holds positions on the boards of several subsidiaries. This, in turn, could limit access to funding and drive up borrowing costs for the group’s entities.
“The group will need regular access to both equity and debt markets, given its large growth plans and refinancing needs. We believe both domestic and international banks, as well as bond market investors, consider Adani entities as a group, which could lead to exposure limits being set across the board,” S&P noted in its assessment.
The credit agency specifically downgraded Adani Green Energy’s outlook to “negative” from “stable” due to its link to the bribery allegations. It also lowered the outlook for Adani Electricity and Adani Ports to “negative,” warning that the ratings for these entities could fall further if the charges are substantiated.
S&P forecast that the group’s cash flows could be significantly impacted by the expected tightening of funding access. Following the indictment, both bonds and stocks of the Adani Group fell for a second consecutive session on Friday.
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