Moody's cuts rating on 4 Adani group companies to negative, stock rout continues

• Moody's revised its rating on four Adani group companies to negative from stable.
  
  
• These rating actions follow the significant and rapid decline in the market values of the Adani group companies, the rating agency said.
  
  
• Seven of the nine Adani group stocks ended in the red on Friday.
  

Moody's Investors Service on Friday lowered its rating on four Adani group companies to negative from stable after a significant and rapid decline in market value following a report by US-based short seller Hindenburg Research.

In a statement, Moody's said the rating outlook for Adani Green Energy, Adani Green Energy Restricted Group, Adani Transmission Step-One and Adani Electricity Mumbai had been changed to negative from stable.

"These rating actions follow the significant and rapid decline in the market equity values of the Adani group companies following the recent release of a report from a short-seller highlighting governance concerns in the group," it said.

Earlier last week, the rating agency said that rapid decline in the market capitalisation of the Adani group companies is likely to have an adverse impact on the group’s ability to raise capital or refinance its debt in the next two years.

The Hindenburg report on Adani group that was released on January 24 has altered the fortunes of the group as well as Gautam Adani, the chairman of the group. The US-based research firm alleged that the group has engaged in stock manipulation, accounting fraud and more.

On Thursday, index provider MSCI said it will announce changes in the free-float status in some Adani securities. “MSCI has determined that the characteristics of certain investors have sufficient uncertainty that they should no longer be designated as free float as per our methodology,” said MSCI in a statement.

This was after it received feedback from market participants concerning the eligibility and free-float determination of some of the group’s securities, said US-based MSCI in a statement.

Stock rout continues

In the meanwhile, the freefall in the Adani group stocks continued for the second straight session on Friday. The MSCI’s announcement on Thursday had snapped a 2-day recovery rally in the stocks.

Seven of the nine Adani group stocks ended in the red on Friday as Adani Ports and SEZ, and Ambuja Cements closed higher.



Source: BSE

(With PTI inputs)