Investment Information and Credit Rating Agency of India Limited (ICRA) has revised the outlook for two Adani group companies, Adani Ports and Adani Total Gas from "stable" to "negative", while reaffirming the ratings.

The projection change was primarily brought on by a fall in the Adani Group's financial adaptability as a result of substantial share price declines following a negative report by US-based short seller Hindenburg.

The Adani Group was charged by Hindenburg in a report released in January with "brazen stock manipulation and accounting fraud" as well as employing several offshore shell companies to artificially increase stock values.

ICRA said that Adani Ports' history of refinancing a significant portion of its debt with borrowings of longer terms at cheaper interest rates was one of the company's core credit strengths, which had been negatively damaged since the Hindenburg assault.

The ratings agency also said that its influence on the credit quality of Adani Ports will be monitored and that it sees an elevated risk of regulatory and legal attention on the group businesses. It added that Adani Ports' financial profile "remains healthy" and that a significant $650 million international loan repayment is not due until FY25.

ICRA stated that it continues to take into account the solid business profile of the company, which is characterised by its favourable operating features, geographically dispersed footprint, diverse cargo mix, and long-term client tie-ups.
ICRA rates the long-term fund- and non-fund-based instruments of Adani Ports with an AA+ rating, and the commercial paper programme with an A1+ rating. About Adani Total Gas, ICRA stated that the company has considerable long-term debt finance needs due to its high capital requirements.
The company's capacity to raise finance from domestic and foreign markets may be hampered by the unfavourable opinion surrounding the group, which might potentially increase the cost of capital.
The agency has A1+ ratings for short-term fund and non-fund based instruments and AA- ratings for long-term fund based limit instruments. Because of ATGL's strong cash flow from ongoing operations, which is defined by appropriate return and debt protection criteria, the ratings continue to take this into account, according to ICRA.

On Friday,  shares of Adani Ports surged 9.76% to settle at Rs 683.70, while shares of Adani Total Gas were locked in 5% upper circuit.

As per analysts, the conglomerate's agreement with US-based GQG Partners will allay worries about the former's capacity for raising capital.

On March 2, Adani promoter sold sahres in four  group companies  namely Adani Ports and Special Economic Zone, Adani Green Energy, Adani Transmission and Adani Enterprises, through block deals to Florida-based GQG Partners for about Rs 15,446 crore.

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