Adani Bonds Placed on Negative Watch by Fitch Amid Bribery Case

Adani Bonds: Fitch Ratings has put multiple Adani Group bonds on a "watch negative" status after the conglomerate faced bribery allegations last week. This comes at a time when the group's flagship company, Adani Enterprises, has witnessed a decline of nearly 20 per cent in its share price.

Bonds of Adani Energy Solutions, Adani Electricity Mumbai and Adani Ports and SEZ (Special Economic Zone), including both rupee and dollar-denominated debts, have been majorly impacted.

“The RWN (rating watch negative) reflects increased corporate governance risk and potential contagion risk that could affect the funding access and liquidity of the Fitch-rated corporate entities related to the Adani group, following the US indictment,” the global rating agency reportedly stated.

While there is no immediate risk to liquidity, as the conglomerate assured investors last week that its cash reserves and profits are sufficient to cover the next 28 months of debt obligations, the recent bribery charges might cause a shake-up.

Fitch has already warned that the US charges could hinder the group's ability to secure funding in the medium to long term.

Adani's green arm bears the brunt

No doubt, Adani Green Energy's share price was the hardest hit following the bribery allegations, but the stock has been struggling for a while now. Since the start of this month, the stock has dropped by over 40 per cent on the National Stock Exchange.

Renewable energy is one of the conglomerate's biggest bets and any setback in the space could dampen the investor sentiment.

At 9:45 am, the shares of Adani Green Energy were trading at Rs 920.75 price level, down by over 5 per cent on the bourses.

“While the US indictment mainly involves AGEL's key leadership, the proceedings and the outcome could reflect significantly weaker corporate governance practices of the group and lead to negative rating actions,” the rating agency stated.