SEBI Demands Details From Credit Agencies Regarding Adani Companies’ Loans: Report

Market regulator Securities and Exchange Board of India (SEBI) has sought details from credit rating firms regarding the local loans and securities of Adani Group companies. The information required by SEBI includes all outstanding ratings, outlook, and any changes they have made to their outlook after talks with representatives of Adani Group companies.

Even though most of the information is available in public domain, SEBI is evaluating that whether the current selloff in Adani Group companies will have any impact on the liquidity positions and the debt repaying capacity of the companies, The Economic Times reported citing sources as saying.

The stock rout caused by the US-based short seller, Hindenburg Research, has resulted in the stocks of the 10 listed Adani Group companies to plummet between 22-77 per cent. 

In Wednesday’s session, Adani Group shares were facing selling pressure with flagship company Adani Enterprises falling as much as 12 per cent to hit an intraday low of Rs 1,381. Adani Power fell 5 per cent, Adani Wilmar declined 5 per cent, Adani Green Energy dropped 5 per cent, Adani Total Gas tumbled 5 per cent, Adani Transmission fell 5 per cent, Adani Ports tumbled 5 per cent, ACC fell 4.3 per cent, Ambuja Cements fell 4 per cent and NDTV declined 5 per cent.

Meanwhile, none of the domestic credit ratings agencies have changed their outlook on Adani Group companies but global ratings agencies have revised their outlook on a slew of Adani firms.

S&P has downgraded Adani Ports and SEZ and Adani Electricity from ‘stable’ to ‘negative’ and Moody's has revised its ratings of Adani Green Energy, Adani Green Energy Restricted Group, Adani Transmission Step-One, and Adani Electricity Mumbai to ‘negative’ from ‘stable’.

Rating firms look out for a ‘material event’ factor which is a sudden fall in share prices while evaluating a borrower’s ratings and outlook. Any kind of uncertain event like a natural calamity, damage caused by an unforeseen loss, regulatory stricture comes under ‘material events’. As per the regulations, any rating changes resulting from 'material event' must be disclosed within a week of the incident.

"Since it's close to a month since the Hindenburg report, it possibly cannot be a ‘material event’ for any rating action. Under the circumstances, rating companies would keep track of other parameters, like a further fall in share price, or other developments for any action," ET quoted a banker.