Adani Group's troubles deepened on Tuesday as two more credit rating agencies cut their outlook for the Indian conglomerate, whose billionaire founder Gautam Adani has been charged by US authorities over an alleged $265 million bribery scheme.
The US indictments' widening fallout comes after S&P on Friday put Adani Ports, Adani Green Energy and Adani Electricity on a downgrade warning and as partners reviewed individual projects involving the group.
India's Andhra Pradesh is likely to suspend a power purchase deal linked to the group, two state government sources said, in what would be the first such move by an Indian state government after the US charges over solar power-supply contracts.
Most of the alleged bribes were paid to a government official to get Andhra Pradesh's state electricity distribution companies to agree to purchase power, the US indictment said.
The allegations are having a knock-on impact across the Adani empire as Moody's Ratings lowered its outlook for seven Adani firms, including Adani Ports and Adani Green, to negative from stable, saying the US indictments will likely weaken the group's access to funding and increase its capital costs.
Ratings agency Fitch earlier put some Adani Group bonds on watch for a possible downgrade, also citing the US indictment, while Sri Lanka said it was reviewing any potential fallout for the Indian group's projects in the neighbouring island nation.
A US agency that agreed to lend more than $550 million to a Sri Lankan port development said on Sunday it was reviewing the impact of the bribery accusations against Adani, his nephew Sagar Adani and six others over the alleged scheme to bribe Indian officials to secure power supply deals.
The Adani Group has denied the allegations, as well as those made in a parallel civil case by the US Securities and Exchange Commission, but news of the indictment has wiped $34 billion off the value of shares in 10 companies owned by the Indian giant.
Adani stocks deepened losses on Tuesday, with Adani Green the hardest hit, closing 7.3% lower.
Fitch said in a statement it had placed Adani Energy Solutions Ltd, Adani Electricity Mumbai and some of Adani Ports and Special Economic Zone rupee and dollar bonds on "watch negative," signalling a heightened probability of a downgrade that could affect the price of Adani debt.
Adani Ports, India's largest private ports operator, owns 51% of a new container terminal project expected to begin operations next year in Sri Lanka's city of Colombo.
Sri Lanka's finance and foreign ministries were reviewing the allegations, cabinet spokesperson Nalinda Jayatissa told reporters on Tuesday, adding that the government would take a decision once the ministries had compiled their reports.
Fitch also downgraded its ratings on four Adani subsidiary senior unsecured dollar bonds from stable to negative, saying it will monitor for any impact on the group's financial position and watch for "any material deterioration" in its funding.
Adani Green responded on Tuesday to TotalEnergies saying it would halt investments in Adani firms, saying there was no new financial commitment under discussion. Meanwhile, Adani Enterprises, Adani's flagship firm, and Singapore-based Wilmar International, will delay a proposed sale of at least 12% in their Adani Wilmar Indian food joint venture, Bloomberg News reported.
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