Fitch Revises Outlook to Stable for Two Adani Group Firms

Fitch Ratings has revised the outlook for two key Adani Group entities, Adani Energy Solutions Ltd (AESL) and Adani Electricity Mumbai Ltd (AEML), to 'Stable' from 'Negative'. The agency also affirmed their long-term issuer default ratings at 'BBB-'. This positive outlook revision reflects Fitch's assessment that contagion risks across the broader Adani conglomerate have eased. The group has maintained access to diverse funding channels, a crucial factor despite a US indictment in November 2024 involving board members of an affiliate entity. Furthermore, a ruling by India's Securities and Exchange Board of India (SEBI) in September 2025 found no violations of disclosure norms or evidence of market manipulation, as alleged in a 2023 short-seller report. Fitch noted that liquidity and funding remain adequate for both AESL and AEML, supported by robust cash flows and ongoing investment momentum. Adani Group entities have collectively raised over $24 billion from various lenders since late 2024. The report also highlighted Adani Ports and Special Economic Zone Ltd's (APSEZ) strong business profile and healthy financial projections.

Impact: This rating upgrade signifies increased investor confidence in the Adani Group's financial stability and operational resilience. It suggests a lower perceived risk for these entities, which could positively influence their borrowing costs and market valuation. The affirmation of the 'BBB-' rating indicates a solid investment-grade credit profile. The easing of contagion concerns is crucial for maintaining the group's overall financial health and funding access. Rating: 7/10

Difficult Terms: Contagion Risk: The risk that problems in one part of a financial system or conglomerate can spread to others. Issuer Default Rating (IDR): An external credit assessment of a borrower's ability to meet its debt obligations. Senior Secured Notes: Debt instruments that are backed by specific collateral, giving bondholders priority in repayment in case of default. Market Manipulation: Illegally influencing stock prices through artificial transactions or spreading false information. Disclosure Norms: Regulations requiring companies to publicly share material information with investors. Short-Seller Report: A report published by investors who bet on a stock price decline, detailing reasons why they believe the stock is overvalued. Liquidity: The availability of cash or assets that can be quickly converted to cash to meet short-term financial needs. Funding Sources: The various ways a company obtains money for its operations and growth, such as loans, bonds, or equity. Eased: Reduced or lessened. Affirmed: Confirmed or upheld a previous rating or assessment. Subsidiary: A company controlled by a holding company. Divestment: The sale of assets or business units. Robust Cash Flows: Strong and consistent generation of cash from business operations. Investment Momentum: Continued strong investment activity and growth. EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization, a measure of operating profit. Leverage: The extent to which a company uses debt to finance its assets. Capital Expenditure (Capex): Investment made by a company in fixed assets like property, plant, and equipment. Credit Profile: An assessment of a borrower's creditworthiness and ability to repay debt. Downgrade Sensitivity Level: The threshold of financial metrics beyond which a credit rating could be lowered. Asset Availability: The extent to which a company's operational assets are available and functioning. Operating Performance: How well a company is performing in its core business activities. Regulatory Returns: Profits earned by a company based on regulated tariffs or pricing structures.