Rating agencies fixate on Adani Group, a group company that should get a higher rating from ‘Sorven’

Photo: PTI (FILE PHOTO) Adani Group

Strong points

  • Adani Group’s business is growing rapidly and debt reduction is visible
  • Global credit rating agencies have assigned India a minimum investment rating of ‘BBB-‘
  • Soon a company in the group will become the first company to have a rating higher than that of the sovereign

An Adani Group company is expected to be rated higher than India’s sovereign rating soon. Significantly, the Adani Group business of Asia’s richest person, Gautam Adani, is growing rapidly and debt reduction is being seen. Adani Group Chief Financial Officer (CFO), Jugeshinder (Robby) Singh, told selected investors in New Delhi on October 10 that a group company would soon become the first company in India to have its entire business in the country and to have a rating higher than that of the sovereign. . Two people present at the meeting provided this information. Singh said an announcement in this regard would be made soon. However, he did not reveal the name of the company.

Global credit rating agencies such as S&P and Fitch have assigned India a minimum investment rating of ‘BBB-‘. Most companies, including public sector giants, are rated at or below sovereign rating. In June last year, Fitch Ratings rated billionaire businessman Mukesh Ambani’s Reliance Industries Ltd (RIL) a notch above India’s sovereign rating. This was done by invoking the company’s debt reduction. However, some may argue that Reliance’s operations are also outside the country.

Singh told the investors’ meeting that all the activities of the Adani Group company are in the country and it will be the first Indian company to achieve such a rating. At present, Adani Transmission Limited is listed at par with Sovereign among the six listed companies of the Adani Group. The company has been rated BBB- (negative outlook) by Fitch, BBB- by S&P and Baa3 (stable outlook) by Moody’s Investors Service. These are the same ratings that the three agencies also gave India. S&P Global Ratings on Thursday withdrew its rating from Adani Transmission Ltd at the company’s request. The company needs to be restructured, which has been done.

Adani Green Energy Limited, a group company, also benefits from a sovereign rating. An email sent to the Adani Group seeking comment in this regard has not elicited a response up to the time of writing. Singh told an investor meeting that contrary to popular belief, the group does not have a lot of debt and its expansion is also being financed with equity.

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