By Scott Murdoch and Tom Westbrook

(Reuters) -Ratings agency Fitch has put some Adani Group bonds on watch for a possible downgrade after U.S. authorities indicted some key executives of the Indian conglomerate on bribery charges.

Adani Energy Solutions Ltd, Adani Electricity Mumbai and some of Adani Ports and Special Economic Zone rupee and dollar bonds are now on “watch negative”, Fitch said in a statement.

Ratings on four Adani subsidiary senior unsecured dollar bonds were downgraded from stable to negative, the agency said.

Adani stocks opened further down on Tuesday. Of 10 listed companies that have lost about $33 billion in market value since the indictment, Adani Green has been the hardest hit, losing about $9.7 billion. The stock was down 7.5% on Tuesday.

A ratings watch negative signals a heightened probability of a rating downgrade that could affect the pricing of hundreds of millions of dollars worth of Adani’s debt.

Fitch will monitor the U.S. investigation for any impact on Adani’s financial position, it added in Tuesday’s statement.

Specifically, it would watch for “any material deterioration in near- to medium-term funding access, including their ability to roll over existing credit lines or access new facilities, as well as potentially higher credit spreads,” it said.

Rating agency S&P Global put Adani Ports, Adani Green Energy and Adani Electricity on a downgrade warning due to the U.S. indictments.

On Monday French oil major TotalEnergies said it would halt financial contributions to its Adani Group investments following last week’s indictment.

U.S. prosecutors have charged billionaire Gautam Adani, the group’s founder, his nephew Sagar Adani and six others for their alleged roles in a $265-million scheme to bribe Indian officials to secure power supply deals.

The Adani Group has dismissed as “baseless and denied” the accusations, along with those made by the U.S. Securities and Exchange Commission in a parallel civil case, adding it would “seek all possible legal recourse”.

U.S. authorities said the bribes were paid to win contracts expected to yield $2 billion of profit over 20 years and develop India’s largest solar power plant.

In a memo to clients, major Adani backer GQG Partners sought to ease concerns about its exposure to Adani.

Except for Adani Green Energy Limited (AGEL), the Adani Group does not need to raise more capital at this point, GQG said in the memo, seen by Reuters.

The Australia-listed investment firm said it did not see the indictment having a material impact on Adani’s businesses.

But it warned that if Adani did need additional financing, the matter would restrict its ability to access foreign capital.

Any negative actions by the Indian government could have meaningful implication for Adani, it added, though saying the Indian government would maintain support for Gautam Adani.

GQG picked shares worth $1.87 billion in four Adani group companies last year, shortly after a short-seller’s critical report sparked a stock rout.

GQG has a stake of nearly 20% across Adani Group companies, accounting for about 6.1% of its total assets of $158.6 billion. As of Thursday GQG’s total exposure fell to 5.2% of total assets.

GQG did not reply to a request for comment.

Adani dollar bonds steadied on Tuesday and prices rose slightly after three days of heavy falls.

Prices on some of the more liquid Adani Ports and Special Economic Zone debt maturing between 2027 and 2041 were up between half a cent and 1.5 cents on the dollar. They have fallen about 8 cents to 12 cents since news of the indictment.

Leading ESG ratings provider Morningstar Sustainalytics said it would review Adani Green Energy’s ESG risks.

“No business, green or brown, can represent a good investment opportunity without robust governance policies and practices,” Hortense Bioy, its head of sustainable investing research, said in an email.

This week, Japan’s SBI Asset Management published the extent of exposure to Adani Group entities of four of the funds it manages.

Its SBI/UTI India Infrastructure Equity Fund had the highest exposure at 2.55%, while that of the other three ranged from 2.08% to 0.21%, SBI said in a statement.

(Reporting by Scott Murdoch, Praveen Menon in Sydney and Tom Westbrook in Singapore; Additional reporting by Chris Thomas and Angela Christy in Bengaluru, Isla Binnie and Anton Bridge; Editing by Clarence Fernandez)

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