Moody’s states that a part of Adani Group’s planned capital expenditures can be postponed

On Friday, Moody’s Investors Service, a global credit rating agency, stated that a part of Adani Group’s intended capital expenditures can be postponed.

Additionally, Moody’s mentioned that the unfavorable events regarding the Adani Group, such as the sudden decrease in the market value of the group’s company stocks, will affect its capability to obtain capital.

On Friday, Moody’s Investors Service issued a statement regarding the credit ratings of Adani Ports and Special Economic Zone Limited, Adani Green Energy Limited, and Adani Transmission Limited. According to Moody’s, these companies’ ratings are sustained by their regulated infrastructure businesses that have long-term sales contracts, or their strong operating cash flow and commanding market position.

The statement mentioned that due to the recent decrease in the market equity values of the Adani Group companies, caused by a short-seller report that raised concerns about governance, Moody’s immediate focus is on evaluating the rated entities’ overall financial flexibility, including their liquidity situation and access to funding for refinancing and ongoing growth plans.

However, Moody’s also recognized that these adverse developments are likely to reduce the group’s ability to raise capital for funding committed capital expenditures or refinancing maturing debt over the next 1-2 years. Despite this, the agency noted that a portion of the capital expenditures can be deferred and the rated entities do not have significant debt maturing until FY2025.

Moody’s stated, “Due to the significant and quick fall in the market value of Adani Group companies after the recent publication of a short-seller report that raised governance issues, our primary attention at present is evaluating the financial versatility of the rated entities, including their liquidity situation and ability to secure funding to finance refinancing and future growth plans.”

Moody’s added, “However, these unfavorable developments are expected to decrease the group’s ability to obtain capital for funding planned capital expenditures or refinancing mature debt in the next 1-2 years. We acknowledge that a part of the capital expenditures can be postponed and the rated entities don’t have substantial debt due until FY2025.”

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