The Indian Panorama

Tag: Moody

  • After Fitch, Moody’s also switches outlook on Adani group firms to ‘negative’

    After Fitch, Moody’s also switches outlook on Adani group firms to ‘negative’

    NEW YORK (TIP): Moody’s Ratings has on Tuesday , November 26, 2024, affirmed the ratings of seven Adani Group companies from ‘stable’ to ‘negative’. In a statement the global rating firm said, “At the same time, we have changed the outlook on all seven issuers to negative from stable.”

    Earlier on Tuesday , November 26, 2024, Fitch Ratings also put Adani group firms on a negative rating watch.

    The seven affected issuers are:
    1. Adani Green Energy Limited Restricted Group (AGEL RG-1), which comprises Adani Green Energy (UP) Limited; Parampujya Solar Energy Private Limited; Prayatna Developers Private Limited,
    2. Adani Green Energy Limited Restricted Group (AGEL RG-2), which comprises Wardha Solar (Maharashtra) Private Limited, Kodangal Solar Parks Private Limited and Adani Renewable Energy (Rj) Limited,
    3. Adani Transmission Step-One Limited (ATSOL), Adani Transmission Restricted Group 1 (AESL RG1), which comprises Barmer Power Transmission Service Limited; Raipur-Rajnandgaon-Warora Transmission Ltd;
    4. Sipat Transmission Limited; Thar Power Transmission Service Limited; Hadoti Power Transmission Service Limited; Chhattisgarh-WR Transmission Limited, and 5. Adani Electricity Mumbai Limited (AEML).
    6.Adani Ports and Special Economic Zone Limited (APSEZ) and
    7. Adani International Container Terminal Private Ltd (AICTPL) have also been subjected to an outlook change from stable to negative, Moody’s said.

    Moody’s said its rating actions follow the indictment of Adani Green Energy Ltd’s (AGEL) chairman Gautam Adani and several senior management team members by the US Attorney’s Office in a criminal case and the filing of charges by the US Securities and Exchange Commission (SEC) in a civil case. The charges and allegations include: (1) bribery of Indian government officials, (2) securities and wire fraud, (3) conspiracy to violate the US Foreign Corrupt Practices Act and obstruct justice, (4) false statements made in AGEL’s annual reports, and (5) false statements made to the US government in relation to its investigation into the group.

    Identifying governance risks as material for its rating action, Moody’s said the negative outlook considers that this indictment of Mr. Adani and other senior Adani executives “will likely weaken Adani Group’s access to funding and increase its capital costs” and recognizes “the possibility of broader weaknesses in the governance structure across the rated Adani group entities as well as potential operational disruptions, including on their capital spending plans, while legal proceedings are going”.

    “Although the allegations and the charges made by US Attorney’s Office and SEC pertain to AGEL’s chairman and senior management team members, we believe they could have a broader credit impact on all rated Adani Group issuers, given Gautam Adani’s prominent role as chairman of each of the rated entities or their parent companies as well as the controlling shareholder,” it reasoned.

    The firm said an upgrade of these firms’ ratings is unlikely in the near term, given the negative outlook on all seven issuers. “However, we could change the rating outlooks to stable if legal proceedings conclude clearly with no material negative credit impact,” it noted, adding that the rated firms could also be subjected to downgrades based on specific risks relating to each business, including “access to funding” challenges that may arise for a couple of them.

  • Moody’s slashes 2022 India growth estimate to 9.1%

    Moody’s slashes 2022 India growth estimate to 9.1%

    Moody’s on Thursday, March  16,  slashed India’s growth estimate for the current year to 9.1 per cent, from 9.5 per cent earlier, saying high fuel and fertiliser import bill could limit the government’s capital expenditure. In its Global Macro Outlook 2022-23 (March 2022 Update) titled ‘Economic Growth will suffer as fallout from Russia’s invasion of Ukraine builds’, the rating agency said that India’s growth is likely to be 5.4 per cent in 2023. It said India is particularly vulnerable to high oil prices, given that it is a large importer of crude oil. Because India is a surplus producer of grain, agricultural exports will benefit in the short-term from high prevailing prices. “High fuel and potentially fertiliser costs would weigh on government finances down the road, potentially limiting planned capital spending. “For all of these reasons, we have lowered our 2022 growth forecasts for India by 0.4 percentage point. We now expect the economy to grow by 9.1 per cent this year,” Moody’s Investors Service said.

  • Inflation exceptionally high in India: Moody’s

    Inflation exceptionally high in India: Moody’s

    New Delhi (TIP): India’s inflation is at “uncomfortably high” level, which is an exception among Asian economies, Moody’s Analytics said on Tuesday. Higher fuel prices will keep upward pressure on retail inflation and keep the RBI from offering further rate cuts, said Moody’s Analytics, a financial intelligence company. Retail inflation rose to 5% in February, from 4.1% in January. The RBI mainly takes into account retail inflation while deciding on the monetary policy.

    Core inflation (which excludes food, fuel and light) was up 5.6% in February, from 5.3% in January, Moody’s Analytics said, adding India’s inflation is “uncomfortably high”.

    In its macro roundup, Moody’s Analytics said inflation is subdued in most of Asia, and expected to only gradually pick up over 2021 because of rising oil prices and economies starting to reopen. Brent crude has climbed 26% this year at around $64 per barrel. It was around $30 per barrel in March 2020, when the Covid crisis was near its peak.

    “India and the Philippines are exceptions. In these economies, inflation is above comfort levels, adding to the list of challenges for policymakers,” it said.