S&P has removed Adani Green Energy Ltd from surveillance. At the same time, the agency has also said a big thing by taking the company's debt. Due to the falling shares of Adani Green, investors are increasing tension and they are constantly selling.
Since the Hindenburg report, shares of Adani Group companies have fallen drastically. However, on the last trading day of this week, there was a relief news for the Adani Group. Global rating agency S&P has removed Adani Green Energy Limited from surveillance. Also, the rating agency has given the company a BB+ rating. It is believed that this news can reduce the tension of Adani Green investors. Adani Green shares have fallen drastically since the Hindenburg report.
Why was it kept under surveillance?
On December 14 last year, the agency had changed its criteria for rating project finance transactions. Also, Adani Green Energy was kept under surveillance under this criterion. The agency has now said it has completed its review of AGEL RG2 and we believe the company's projects do not affect our criteria. AGEL RG2 consists of three operating entities - Wardha Solar (Maharashtra) Limited, Kodangal Solar Park Limited, and Adani Renewable Energy (RJ) Limited.
The loan is completely safe.
These entities are co-issuers and co-guarantors of $362.5 million senior secured fixed-rate 20-year bonds. The three issuers collectively own and operate a portfolio of 570 solar assets with an installed capacity of 10 MW in two states of India. S&P said that AGEL RG2's debt is completely safe. Ring fenced assets protect investors. AGEL RG2 is not currently affected by governance risks and funding challenges for the Adani Group.
Fear among investors
Shares of Adani Green have fallen more than 70 per cent since the Hindenburg report. Due to this, fear has arisen among investors and the result is coming out in the form of a sell-off. Shares of Adani Green Energy Ltd have fallen nearly 74 per cent in the last one month. On Friday, the shares fell 5 per cent to close at Rs 486.50.
Hindenburg's claim
Hindenburg has claimed in its report that the seven listed companies of the Adani Group are 85 percent overvalued. The report also claimed that the Adani Group has been engaged in stock manipulation and money laundering for decades. Since this report, adani group shares have fallen drastically and the market capitalization of companies has come down to half.
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