Fitch Ratings has reaffirmed the credit rating of Adani Ports and Special Economic Zone Limited (APSEZ) but maintained a Negative Outlook, citing ongoing governance concerns and financial instability within the Adani Group. The decision comes as the conglomerate faces intense scrutiny following a US indictment involving Adani Green Energy Limited (AGEL) and a massive market sell-off that wiped out Rs 3.4 lakh crore from the group’s valuation.
In a major setback, the market valuation of the Adani Group has plunged by 21% in FY25, with several of its key entities experiencing sharp declines. According to market data, Adani Green Energy suffered the worst hit, with its market cap plummeting to Rs 1.46 lakh crore on March 21, 2025, from Rs 2.90 lakh crore a year ago. Analysts attribute this decline to a $265 million bribery case involving Gautam Adani, his nephew Sagar Adani, and other company officials.
Adani Enterprises, the group’s flagship company, witnessed a 27% drop in market cap, now valued at Rs 94,096 crore. Meanwhile, APSEZ lost Rs 33,029 crore, a 11.4% decline, adding to concerns about its financial health. Other Adani companies, including Adani Energy Solutions (-18.95%), ACC Cement (-23.1%), and NDTV (-41.58%), have also suffered substantial losses.
Market experts point to several key factors behind this steep downturn, including:
- US SEC indictment of Gautam Adani and Sagar Adani for bribery and defrauding American investors.
- Swiss authorities freezing over $310 million in suspected money laundering cases tied to the Adani Group.
- Regulatory pressure from SEBI, amid lingering concerns raised by US-based short-seller Hindenburg Research in 2023.
- Weakening investor confidence, leading to a significant pullout of foreign investments.
- Global economic challenges, including high interest rates and policy uncertainty, hurting capital-intensive sectors like renewable energy and infrastructure.
- Political risks, with former US President Donald Trump’s threat of reciprocal tariffs, impacting Adani’s global business prospects.
Despite these setbacks, Gautam Adani remains India’s second-richest man, with a net worth of $60.6 billion as of March 24, 2025, according to the Forbes Real-Time Billionaires List.
While Fitch Ratings acknowledged that Adani Group has demonstrated adequate funding access, it stressed that the Negative Outlook on APSEZ reflects concerns over corporate governance weaknesses. The ongoing US investigations could expose further risks, potentially leading to a downgrade in the near to medium term.
Fitch, however, noted that APSEZ’s business fundamentals remain strong, with a cash balance of INR 77 billion as of December 2024 and operating cash flow sufficient to cover INR 66 billion in debt maturities through FY26. Additionally, the company retains flexibility in executing its expansion projects, providing some cushion against market volatility.
The combination of regulatory scrutiny, legal challenges, and financial turmoil has placed Adani Group under immense pressure. While APSEZ remains financially resilient, Fitch’s decision to maintain a Negative Outlook signals that governance risks could have far-reaching consequences for the company and the broader Adani conglomerate.
