Adani bribery case: S&P lowers outlook on 3 Adani units, raises funding concerns

S&P Global Ratings has revised its outlook on three Adani Group entities to ‘negative,’ citing concerns over the bribery allegations against the group’s chairman, Gautam Adani, and other senior executives.
The agency expressed concerns that the accusations could erode investor confidence, impair funding access, and escalate borrowing costs for the group.
“A US indictment of three board representatives of an unrated Adani group entity could affect investor confidence in other Adani group entities (because the founder is on the board of multiple entities within the group), thereby potentially impairing their funding access and increasing their funding costs,” S&P said.
The entities affected include Adani Electricity Mumbai Ltd (Adani Electricity), Adani Ports and Special Economic Zone Ltd (Adani Ports), and Adani Green Energy Ltd Restricted Group 2 (AGEL RG2).
While S&P affirmed its ‘BBB-‘ ratings on Adani Electricity and Adani Ports, it lowered its outlook to negative. For AGEL RG2, a subsidiary of Adani Green Energy Ltd, the agency revised its outlook to negative while maintaining its ‘BB+’ issue rating.
S&P stated that the negative outlook reflects potential risks to cash flows if funding access diminishes or financing costs increase significantly.
These developments, coupled with the ongoing investigation into the allegations, could further impact the governance and business profiles of the Adani Group.
The bribery charges follow the earlier Hindenburg Research report, which raised questions about the group’s financial practices.
The subsequent investigations by the Supreme Court and Sebi added to the scrutiny.
S&P highlighted that the US indictment of board members from an unrated Adani entity has raised governance concerns that could spill over to other group entities, given Gautam Adani’s direct involvement across multiple firms.
Moody’s Ratings also weighed in, labeling the bribery allegations as “credit negative” for the group. The agency indicated it would closely examine the group’s governance practices when assessing its ability to secure future capital.