Blow to Adani, Fitch puts AEML’s $2 billion note at risk

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New Delhi : Adani Group has got another blow. Fitch Ratings on Monday said the Hindenburg Research report alleging irregularities in Adani Group’s accounting has had limited short-term impact on the company’s cost of funding. The rating agency said this while confirming the credibility of Adani Electricity Mumbai. According to a report in news agency Bhasha, the rating agency issued a statement saying that it has affirmed ‘BBB-minus’ rating on the US Dollar Senior Secured Note of Adani Electricity Mumbai Limited (AEML). These are due to mature in 2030. It also affirmed ‘BBB-minus’ rating on AEML’s $2 billion global medium-term note program and notes issued under it.

Downgraded rating of company management and operations

‘BBB’ refers to an investment grade rating in which the credit risk is relatively high. AEML’s financial position is supported by factors such as high cash flow from regular assets, capital expenditure with regulatory approvals and adequacy of cash, besides non-maturing of any notable debt by February 2030, the statement said. However, Fitch has downgraded AEML’s management and governance ratings to ‘BB+’.

The government answered the question in the parliament

Adani Group and Hindenburg Research have given their reply in the Lok Sabha in the second phase of the budget session of the Parliament on Monday. According to media reports, the Union Finance Ministry on Monday gave its reply in the Lok Sabha to the report alleging accounting fraud and stock rigging by American short seller Hindenburg Research on Adani Group companies. The government said the Hindenburg Research report did not have ‘any significant impact at the systemic level’. However, in a span of two months, the market cap of the group definitely fell by 60 per cent. The Finance Ministry also informed Parliament that the government has not constituted any committee to look into the allegations leveled against Adani Group companies.

Congress MPs had asked the government a question

In the Lok Sabha, questions were asked on behalf of Congress MPs TN Prathapan, Manish Tewari and Jothimani Sennimalai on the ongoing dispute between Adani Group and Hindenburg Research. On behalf of these MPs, latest information was sought on the investigation of alleged rigging of shares of Adani Group companies. Responding to a question by Congress MPs, Union Minister of State for Finance Pankaj Chowdhary said that the Securities and Exchange Board of India (SEBI) has already started the probe and will conclude it within two months as per the Supreme Court order on March 2. .

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