Fitch warns of contagion risk to Adani subsidiaries

Ratings agency Fitch has said that two Adani Subsidiaries, Adani Transmission and Adani Ports face a contagion risk. The report added that this could affect their financial flexibility. The subsidiaries are exposed to the risk as a result of governance weakness at the conglomerate's sponsor level.

However, Fitch has affirmed BBB ratings to the group entities. The ratings of restricted groups would not be constrained at 'BBB', at this stage if other factors driving their credit quality improve.

Fitch also metioned that the debt of Adani group's rated Indian entities as of December 2022 end is secured with US dollar bonds that will mature only from mid-2024. Hence, the liquidity position at all restricted group will benefit from the cash flow generation from January 2023 to March 2024.