InvestorQ : What was the reason for the sudden toning down of the stance of CreditSights on the Adani group leverage?
diksha shah made post

What was the reason for the sudden toning down of the stance of CreditSights on the Adani group leverage?

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shrinidhi Rajan answered.
3 weeks ago
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The entire episode started with the response from Adani group. Adani issued a detailed 15-page note in response to allegations by CreditSights that Adani group was overleveraged. Adani group has underscored that their group company profits had actually grown much faster than growth in debt and hence debt levels in relative terms had actually come down over the years. The Adani group highlighted some factual and calculational errors in the report about estimated EBITDA and projected debt of Adani group companies.

But why did CreditSights do a volte face? It was actually rathe surprising. Adani almost sounded meek and defensive after the Adani responses. Not only did they accept errors but also agreed to change projections based on Adani group presentation. The research arm of Fitch substantially toned down the aggression about Adani group being dangerously levered. Like a farce, Fitch decided to do some face saving by holding on to its stance, but the damage had been done. Finally, it reflected on the analysis and spine of CreditSights.

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