Ratings agency Fitch said two Adani Group subsidiaries were exposed to "heightened contagion risks", possibly affecting their financial flexibility, due to weak governance at the parent conglomerate and other companies in the group.

Adani Transmission Ltd and Adani Ports and Special Economic Zone "would be capped at current rating level of 'BBB-/Stable' till alleged concerns are ironed out," Fitch said in an emailed statement on Wednesday.

Short-seller Hindenburg Research's Jan. 24 report alleged improper use of tax havens and stock manipulation by the ports-to-energy conglomerate - charges it has denied.

Seven listed firms of the Adani Group have shed over $120 billion in market value since the report was published.

Fitch early last month, however, said it had seen no immediate impact on its ratings of Adani Group entities and their securities. It said on Wednesday "there is no rating impact even now."

It also said contagion risk was lower for restricted groups including Adani Electricity Mumbai Ltd and Mumbai International Airport, as their credit profile was supported by "structural enhancements," including limits on debt.

Fitch defines restricted groups as rated entities that benefit from defined cash flow waterfall and other structural protections.

"There would not be any capping on those (the rating for the restricted groups) if other credit factors support higher than 'BBB-' rating," Fitch said. It also said in its report, "cash flow generation from January 2023 to March 2024 will boost the liquidity of the groups."

Most Adani group companies gained on Wednesday after a drop in the previous session following a report that said the conglomerate was seeking to renegotiate debt, which the group refuted. (Reporting by Juby Babu in Bengaluru and Praveen Paramasivam in Chennai; Editing by Sonia Cheema, Nivedita Bhattacharjee and Shinjini Ganguli)