Classification of Adani Group entities under constant watch: CRISIL

Ratings agency CRISIL, the Indian arm of Standard and Poor’s (S&P), said today that it keeps all outstanding ratings, including the Adani Group entity rating, under constant watch.

Any negative regulatory or government action in the wake of the research report, emerging issues around corporate governance will be a key subject to watch, Cresel said in a late-night statement.

It will also monitor any decline in the group’s ability to raise resources from banks or capital markets due to the continued slide in stock prices.

The rating agency took note of the Hindenburg Research report on the Adani Group published on January 24, 2023 and the negative impact on share prices of the companies included in the Adani Group.

Most of the entities included in the Adani Group faced significant price erosion after the Hindenburg Report alleged that the group was involved in a “scandalous scheme of stock manipulation and accounting fraud”. Hindenburg Research claimed an 85 percent drop in the group’s shares “on fundamental valuations only”.

CRISIL has ratings on the Adani Group’s 23 infrastructure and entities linked to the financial sector. These entities include ACC Ltd, Mumbai International Airport Ltd, Adani Power, Adani Road GRICL, Adani Capital, Adani Green Energy (UP) Ltd.

Ratings on these companies are based largely on the strength of their business and financial profiles. This, among other things, factors in the stability of cash flows, the nature of the asset infrastructure with a long lien period and the extent of the cash flow cushions.

In some cases, she added, CRISIL also factored in the additional flexibility available to entities due to its affiliation with and importance to the larger Adani group.

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