Shares of Adani Group stocks witnessed firm trading on Tuesday in an otherwise choppy broader market after global brokerage Bank of America (BofA) initiated credit coverage on the power-to-port conglomerate. The brokerage assigned an “Overweight” rating on several of Adani Group’s U.S. dollar-denominated bonds, boosting investor sentiment across the group’s listed entities.

Ten out of eleven listed Adani Group entities were trading in the green, barring Sanghi Industries, rising in the range of 0.5–3%. Meanwhile, the BSE benchmark Sensex and NSE Nifty were up around 0.25%, paring early losses.

Within the Adani Group, the top gainer was Adani Energy Solutions, which surged as much as 3%. The group flagship Adani Enterprises was marginally up by 0.5%.

Among others, Adani Green Energy, Adani Total Gas, ACC, Adani Ports, Adani Wilmar, Ambuja Cements, and NDTV gained in the range of 1–2%. Bucking the trend, Sanghi Industries shares were down 0.25%.

BofA starts coverage on Adani Group 

The positivity in billionaire Gautam Adani-led group was injected after BofA turned positive on Adani group bonds, citing the conglomerate’s strong fundamentals, resilient operations, and continued funding access despite persistent regulatory scrutiny.

The report notes that Adani’s diversified asset base across ports, utilities, and renewable energy continues to anchor robust cash flows and support credit stability across its bond issuers — Adani Ports and SEZ (ADSEZ), Adani Transmission (ADTIN), Adani Energy Solutions (ADANEM), and Adani Infra (ADINCO).

Bank of America observed that over the past two years, the holding companies of Adani’s bond issuers have shown consistent EBITDA growth and moderation in leverage, supported by capacity expansion and disciplined operations.

“The Adani group is one of India's largest conglomerates operating across various infrastructure sectors with 12 listed entities and around $200bn market cap. The holding companies of the group's USD bond issuers have reported better fundamentals over last two years underpinned by EBITDA growth on capacity expansion along with moderation in leverage,” the report noted.

Looking ahead, the U.S.-based brokerage firm expects ADSEZ, the group’s flagship port business, to maintain leverage around 2.5x despite ongoing investments, buoyed by diversified port operations, steady cargo volumes, and operational efficiency.

“We estimate ADSEZ's leverage to stay 2.5x despite hefty investments. We expect ADTIN and ADANEM to maintain steady credit profiles supported by their diversified operations and regulated and/or long-term fixed-price contracts.”

Similarly, ADTIN and ADANEM are projected to keep leverage under 6x and maintain coverage ratios above 2x in the next three years, thanks to their diversified operations and regulated or long-term contracts.

The report further highlights that restricted groups such as ADINCO, ADGREG, and ARENRJ are also on track to strengthen their credit profiles as debt amortizes in line with bond indentures.

Notably, the Adani Group has faced a storm of global scrutiny since early 2023 following a short-seller report and subsequent investigations by Indian regulators and U.S. authorities. In November 2024, the U.S. Department of Justice indicted Gautam Adani and other executives on governance-related issues.

Yet, BofA notes that the group’s funding channels have remained robust, with continued access to capital at competitive rates — a sign of investor faith in its underlying business strength. Domestic regulators, including Sebi and the Supreme Court of India, have completed inspections without adverse findings, while rating agencies have largely maintained credit ratings, albeit with cautionary outlooks.

“The absence of rating downgrades over the last three years validates the group’s sound operations, structural protections, and strong market access,” the report said, adding that an unfavorable outcome from ongoing investigations remains a risk factor, though credit fundamentals remain intact.

Adani bonds rebounded

After sharp volatility triggered by the 2023 short-seller report and subsequent regulatory probes, Adani’s USD bonds have rebounded sharply. According to BofA, spreads across the Adani complex have tightened by 80–325 basis points year-to-date, now trading below or close to pre-indictment levels for most issuances.

Adani group has 13 USD bonds with total outstanding amount of $5.7 billion including 7 from Ports and logistics business (ADSEZ and ADINCO), 4 from electricity utilities (ADTIN and ADANEM) and 2 from renewable power projects (ARENRJ and ADGREG).

Notably, active liability management — including buybacks of ADSEZ, ADTIN, and ADANEM bonds — has contributed to this recovery. Despite the tightening, BofA argues that Adani bonds still offer relative value compared to sovereign and corporate investment-grade indices in India, Thailand, Malaysia, Indonesia, and China.

BofA noted that even in the event of renewed funding pressure, a slowdown in capex coupled with EBITDA accretion could actually support credit metrics, underlining the group’s operational flexibility.

Bank of America is ‘Overweight’ on several Adani bonds — including ADSEZ 31s/32s, ADINCO 31s, ADTIN 36s, and ADANEM 30s — citing strong credit fundamentals and attractive relative value. It remains ‘Marketweight’ on the rest of the 13 bonds, citing better opportunities elsewhere within the group or limited visibility on the timeline of regulatory resolutions.

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