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Adani Group Crisis Deepens with Moody's Rating Decline

  • Posted on February 12, 2023
  • News
  • By Akta Yadav
Adani Group Crisis:-
Adani Group Adani Group, a major Indian conglomerate was hit with two serious blows. Moody's downgraded its outlook for ratings for certain units and MSCI announced it was cutting the weightings of certain Adani firms in its indexes of stocks. This crisis, caused by a report by a short-seller that accused the company of manipulation of its stock and illegal use of tax havens, led to $110 billion being taken off the value of seven listed companies.a

Moody's Downgrades Adani Units' Ratings Outlook

The news came out on Friday. Moody's reduced its outlook for ratings from stable to negative to Adani Green Energy, the Adani Green Energy Restricted Group and two of the subsidiaries that are part of Adani Transmission. The downgrade comes after a significant and rapid decline in value of the market equity for Adani Group companies after the publication of the report on short-sellers. Adani Group Crisis Adani Group Crisis-Adani Group Crisis

MSCI Cuts Weightings for Some Adani Companies

MSCI has reassessed the size of a few Adani companies' free floatings after finding "sufficient uncertainty" surrounding some investors in Adani companies. This is why MSCI is planning to reduce the weightings of indexes in the areas of Adani Enterprises, Adani Total Gas, Adani Transmission, and ACC. This could reduce India's share of MSCI's Asia or Emerging Markets indexes and result in $1.7 billion of outflows to tracker funds.

Impact on Adani Group Companies

Shares of Adani Enterprises, Adani Transmission as well as Adani Total Gas have already been affected by the MSCI announcement and Adani Total Gas, too. Adani Enterprises closing down 4 percent on Friday after a drop of 11% the day before. Adani Total Gas, as well as Adani Transmission. S&P BSE IPO index will also be dropping Adani Wilmar as part of its monthly review.

Increasing Regulatory Scrutiny

This crisis also placed Adani Group under increased scrutiny. Adani Group under increasing regulatory investigation and an Supreme Court hearing petitions raising fears about the massive losses to investors and requesting the market regulator SEBI to submit its existing legal frameworks before the courts. SEBI is believed to be looking into the links with the Adani Group and certain investors in the company's unsuccessful $2.5 billion share sale. Adani Group Crisis Adani Group Crisis-Adani Group Crisis


It appears that the Adani Group crisis has deepened by Moody's rating reduction and MSCI's reductions to the weightings of certain Adani companies. This has led to an increase in shares of Adani Group companies and increased surveillance by regulators. The long-term implications for the Indian group are yet to be seen while the crisis continues unfold. For more updates keep visiting our website where we provide unbiased, true and top stories of the world.  
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Akta Yadav

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