The rating agency, ICRA, said it is monitoring the impact of recent developments on its rated portfolio in the Adani group, especially the financial flexibility of the group with key monitorables being access to domestic and international capital markets and banking channels, pricing of debt, tightening of debt covenants, recall or acceleration of debt facilities and refinancing.
On January 24, 2023, Hindenburg Research, a USA-based research firm published a report, which had several adverse observations regarding accounting practices, related-party transactions, concentrated shares ownership by a few overseas investments firms and share price movement of the Adani group of companies, including Adani Ports and Special Economic Zone Limited (APSEZL).
Also read:Adani group counters questions raised by Hindenburg Research
Subsequent to the release of this report, the share prices of all the listed Adani group companies, including APSEZL have witnessed a steep decline.
“While the ICRA-rated Adani group entities do not have any immediate refinancing requirement, it is expected for some entities from FY25 onwards,” ICRA said.
However, comfort is drawn from the high visibility on cashflows for these entities supported by the long tenure of the off-take contracts in the case of Adani Transmission Limited (ATL), favourable demand prospects, dominant market position, and long-term customer contracts for APSEZL and favourable economics of conversion in the CGD sector for Adani Total Gas Limited (ATGL) and the strong liquidity position maintained by the group, it added.
Also read:Adani Enterprises calls off ₹20,000-crore FPO
While the large debt-funded capex programme of the group remains a key challenge, ICRA notes that some of the planned capex is discretionary in nature and can be deferred depending on the liquidity position.