S&P places ESG evaluation for Adani Transmission under review

S&P Global Ratings has placed its ESG evaluation for Adani Transmission under review following recent allegations of significant governance issues at the Adani group of companies.

This comes after a short-seller report claimed there were significant governance issues at the Adani group, said the credit rating agency on Thursday (Feb 16), adding that many allegations related to disclosures and actions at the shareholder level.

“We will closely monitor developments, including any investigations by the Indian regulators and any additional disclosures by the Adani group.”

“The allegations related to group governance and disclosures may affect the appetite of fund providers and business partners in supporting Adani Transmission’s growth. This may raise financial and operational risks for the company.”

S&P said it aimed to complete its review in the coming months and assess the implications of the allegations on its evaluation.

The ratings agency earlier gave a score of 63 for Adani Transmission’s ESG evaluation. The score was derived from weighing the group’s environmental, social and governance profile, and marked against a total score of 100.

S&P’s review comes after several other credit agencies downgraded outlook and ratings on the Adani group of companies, including Moody’s and Sustainalytics.

Index provider MSCI said on Wednesday that it would postpone implementation of updates to weightings for two of India’s Adani Group companies, Adani Total Gas and Adani Transmission, to the May benchmark review.

MSCI said on Feb 10 that it would also cut its weightings of some stocks tied to Indian billionaire Gautam Adani in its emerging-markets index, The Wall Street Journal reported.

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Adani Enterprises, listed on the National Stock Exchange of India, has shed about 45 per cent since short-seller Hindenburg published a report in January alleging stock manipulation and fraud.