A man walks past a corporate office of Adani Group in Gurugram, India, November 22, 2024. REUTERS/Priyanshu Singh
NEW DELHI: Gautam Adani’s conglomerate could find it harder to get funding following a US arrest warrant for its billionaire founder, with some banks considering halting fresh credit to the Indian group due to an alleged US$265mil bribery scheme.
Some global banks are considering temporarily halting fresh credit to the Adani Group after the US indictment but maintaining existing loans, sources told Reuters.
Ratings agency S&P Global Ratings warned in a statement that the group will need regular access to equity and debt markets given its large growth plans, but it might find fewer takers.
“We believe domestic, as well as some international banks and bond-market investors, look at Adani entities as a group, and could set group limits on their exposure,” it said.
However, S&P added that the rated entities have “no immediate and lumpy” debt maturities.
Senior executives at two of Adani’s global lenders said that they have had multiple calls within their respective banks to discuss exposure to the group and what the impact of the indictment would be on its financial position.
Research firm CreditSights highlighted refinancing for the conglomerate’s green-energy business, which is at the centre of the allegations, as its biggest near-term concern.
Bonds issued by the Adani Group dropped sharply for a second day last Friday and although the shares of some Adani firms clawed back some last Thursday’s losses, the overall market value of all 10 stocks has dropped by US$27.9bil over two sessions.
Adani Green Energy, which is at the centre of the US allegations, has lost nearly US$7bil of its value.
US authorities have charged Adani and seven other people with agreeing to pay bribes to Indian government officials to obtain contracts that could yield US$2bil of profit over 20 years as well as to develop India’s largest solar-power project.
Adani Group has said the accusations as well as those levelled by the US Securities and Exchange Commission in a parallel civil case are “baseless and denied” and that it will seek “all possible legal recourse”.
Some analysts said the fallout was unlikely to be limited to the Adani group of companies.
“India’s renewable-energy sector, a critical pillar for global climate goals, may face reduced international investment as a result of this controversy,” said Nimish Maheshwari, an independent analyst. — Reuters
