Ratings agency Fitch said two Adani Group subsidiaries are exposed to “heightened contagion risks”, possibly affecting their financial flexibility, due to governance weakness at the parent conglomerate and other Adani group companies.

Fitch said that Adani Transmission Ltd and Adani Ports and Special Economic Zone are prone to risks, according to a note released late on Tuesday.

Fitch early last month said it had seen no immediate impact on its ratings of Adani Group entities and their securities following short-seller Hindenburg Research’s Jan. 24 report on the conglomerate.

Seven listed firms of the Adani Group have shed over $120 billion in market value since the report that alleged improper use of tax havens and stock manipulation by the ports-to-energy conglomerate - charges it has denied.

Fitch still said “cash flow generation from January 2023 to March 2024 will boost the liquidity of the rated groups.”