NEW DELHI: After a CreditSights report raised concerns over Gautam Adani’s growing expansion appetite which is largely debt-funded, all seven Adani Group stocks were trading in the negative, with two of them – and – hitting the 5 per cent lower circuit limit.
were the worst affected as the stock slipped nearly 7 per cent to hit the day’s low at Rs 2,345.70 on BSE. lost 4 per cent to Rs 2,929.05.
and SEZ stock was trading 2 per cent lower at Rs 825 while was 1.5 per cent lower at Rs 3,322.10. stock was down nearly 3 per cent at Rs 3,382.
Earlier in the day, financial services firm CreditSights, which is owned by the Fitch Group, released a fundamental analysis of billionaire Adani’s empire and termed it “deeply overleveraged”.
“Over the past few years, the Adani Group has pursued an aggressive expansion plan that has pressurized its credit metrics and cash flows. The Adani Group is increasingly venturing into new and/or unrelated businesses, which are highly capital intensive and raises concerns regarding spreading execution oversight too thin,” the report said.
Noting that there is little evidence of promoter equity capital injections into the group companies, it said potential strong competition between the Adani Group and
to achieve market dominance could lead to imprudent financial decisions being made.
The credit research and analysis firm said excessive debt and overleveraging by the group could have a cascading negative effect on the credit quality of the bond issuing entities within the group and heightens contagion risk in case any entity falls into distress.
It also warned investors against moderate levels of governance and ESG risks in Adani Group companies.
“Overall, we remain cautiously watchful of the Group’s growing expansion appetite, which is largely debt-funded. We retain our existing Market perform recommendations on the two Adani entities under our coverage, Adani Green Energy (AGEL) and Adani Ports and Special Economic Zone (APSEZ),” the agency said.
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