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S&P Global Ratings has placed Adani Transmission’s ESG valuation under review following concerns of potential corporate governance issues at the Adani group that was recently raised.
The rating agency, which had downgraded the rating outlook for two entities within the group, said that the allegations related to group governance and disclosures “may affect the appetite of fund providers and business partners in supporting ATL’s (Adani Transmission) growth. This may raise financial and operational risks for the company.”
It said that it was closely monitoring developments and would be completing review of the ESG valuation of the company in the coming months. “We will assess the implications of the allegations on our ESG Evaluation,” it said.
‘Reputational risk’
While making its assessment of governance at Adani Transmission, the rating agency would factor in the promoter’s weight in decision-making, including related party transactions. It said that having a common parentage and name-sharing exposed the company to “reputational risks from the wider Adani group”.
The Adani family holds a dominant 75 per cent stake in Adani Transmission and in the year ending March 2022, it operated 18,795 circuit km of electric transmission lines.
The Adani group has been struggling to spin a positive narrative after a short seller Hindenberg Research claimed significant governance issues within the group and flagged irregularities with respect to disclosures and related party transactions.
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