CRISIL Backs Adani Group Amid US Indictment, Affirms Liquidity And Debt Coverage

Rating agency CRISIL Ratings affirmed that the Adani Group has adequate liquidity and operational cash flows to meet its debt obligations and committed capital expenditures. The statement follows the recent US indictment of Gautam Adani, Sagar Adani, and Vneet Jaain, key executives of Adani Green Energy Ltd (AGEL).

The charges, brought by the US Department of Justice and the SEC, allege securities fraud, wire fraud, and violations of anti-corruption guidelines related to AGEL’s bond offering documents. CRISIL noted no negative actions by lenders or investors despite the developments.

Impact on Financial Flexibility

CRISIL acknowledged the indictment’s potential effect on the group’s financial flexibility. It noted a decline in the listed entities’ market capitalisation, a rise in bond yields, and the cancellation of AGEL’s $600 million bond offering. However, the agency said Adani Group’s healthy cash reserves and operational earnings reduce its reliance on external borrowing.

For fiscal 2024, the group reported an Ebitda of ₹82,917 crore and a net debt-to-Ebitda ratio of 2.19. As of September 2024, its cash balance stood at over ₹53,000 crore, compared to long-term debt maturities of ₹27,500 crore for fiscal 2025.

Monitoring Developments Closely Says CRISIL

CRISIL stated that it would monitor regulatory, judicial, or market actions that might impact the group’s financial access. The rating agency emphasized the group’s flexibility to reduce discretionary capex to adapt to financial market changes.

“All outstanding ratings remain under surveillance,” it said, adding that the Adani Group has sufficient liquidity to navigate medium-term challenges.

Any action that hampers refinancing or significantly raises financing costs would be a key risk to watch, CRISIL warned.

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