Fitch downgrades Azure Power U.S. dollar bond outlook to negative amid Adani bribery probe

Global ratings agency Fitch has downgraded the outlook on Azure Power Energy’s U.S. dollar bond to “negative” from “stable” while affirming the rating at 'B'.The downgrade comes amid an ongoing bribery and corruption investigation involving Adani Group chairman Gautam Adani and indictment against Azure Power Global Ltd’s (APGL) former executives and board members by the U.S. Securities and Exchange Commission and Department of Justice.

APGL, the holding company of Azure Power Energy, is undergoing a bribery and corruption investigation under the U.S. Foreign Corrupt Practices Act. Fitch Ratings said the negative outlook reflects the heightened refinancing risk of Azure Power Energy’s U.S.dollar bond due August 2026 should there be further developments relating to the ongoing charges and indictment against AGPL's former executives and board members.

The U.S. Department of Justice (DoJ) last week indicted Adani Group founder Gautam Adani and his associates for allegedly pledging $265 million in bribes to Indian officials to secure solar energy contracts. Three of these associates have ties to Azure Power Global Ltd (APGL). APGL is a renewable energy firm operating solar projects across India.


The ratings agency underscored the delisting from NYSE and corporate governance issues related to delayed financial disclosures as reasons for the downgrade. Fitch said APGL missed the statutory deadline of August 2022 to file its audited financial statements for the year ended March 2022 with the U.S. SEC.

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“APGL's weak internal controls and compliance issues have resulted in management's failure to anticipate and manage timely regulatory financial disclosure, leading to the company's delisting from the New York Stock Exchange,” the ratings agency said in a statement.

“Timely submission of the group's and Azure Power Energy’s financial reports is a key covenant, according to the US dollar note indenture. There has also been multiple key management and board member turnover at the group level,” Fitch added.

The company has been posting losses every year since its inception in 2008, it said in its latest financial statement.

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