Rating agencies fixated on Adani Group, a group company expected to get higher rating from ‘Sorven’
Highlights
- Adani Group’s business is growing rapidly and debt reduction is visible
- Global credit rating agencies have given India a minimum investment rating of ‘BBB-‘
- Soon a group company will become the first firm to have a rating higher than the sovereign
An Adani group company is soon expected to get a higher rating than India’s sovereign rating. Significantly, the business of Asia’s richest person Gautam Adani’s Adani Group is growing rapidly and debt reduction is being seen. Adani Group’s Chief Financial Officer (CFO) Jugeshinder (Robby) Singh told select investors in New Delhi on October 10 that a group company would soon become the first firm in India to have its entire business in the country and have a rating higher than the sovereign. Two people present in the meeting gave this information. Singh said that 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 given India a minimum investment rating of ‘BBB-‘. Most firms, including public sector giants, are rated at or below the sovereign rating. In June last year, Fitch Ratings had rated billionaire businessman Mukesh Ambani’s Reliance Industries Ltd (RIL) a notch above India’s sovereign rating. This was done citing reduction in the company’s debt. However, some may argue that Reliance’s business is outside the country as well.
Singh told the investors meeting that the entire business of the Adani Group firm is within the country and it will be the first Indian company to get such a rating. At present, Adani Transmission Limited is rated at par with Sovereign among the six listed firms of the Adani Group. The company has been rated BBB- (negative outlook) by Fitch, BBB- rating by S&P and Baa3 (stable outlook) rating by Moody’s Investors Service. These are the same ratings that the three agencies have given to India as well. S&P Global Ratings on Thursday withdrew its rating for Adani Transmission Ltd at the request of the company. The company has to be restructured, due to which it was done.
Adani Green Energy Limited, a group company, also has a sovereign rating. An email sent to the Adani Group seeking comment in this regard did not elicit a response till the time of writing. Singh told an investor meeting that contrary to popular belief, the group does not have much debt and its expansion is equally funded by equity.
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