Moody's downgrades 4 Adani cos' outlook, stock rout continues

Moody's Investors Service on Friday downgrades the outlook on four out of the eight Adani Group companies it rates to negative from stable, in a move that could have short-term implications for the embattled group's fundraising ability.

- Ram Sahgal & Mayur Bhalerao

The rating company also retained the outlook for the other four companies and affirmed the ratings for all eight, as the fallout from US Hindenburg short-seller Research's allegations of fraud continues to lash the ports to energy and edible oils firm.

"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 shortseller highlighting governance concerns in the group," Moody's said in a statement.

Adani Green Energy, Adani Green Energy Restricted Group 1, Adani Transmission Step-One, and Adani Electricity Mumbai are the four companies which have suffered an outlook change to "negative" from "stable".

"The changes in the outlook of Adani companies would make it difficult for them to raise money overseas. Even lenders who would be willing to lend them would do so at a higher rate than what the group has got in the past. This might slow down its expansion spree," said an analyst on the condition of anonymity.