The Adani group, led by billionaire Gautam Adani, is “deeply overleveraged,” as the conglomerate has been investing aggressively across several businesses, CreditSights, a debt-research unit of credit rating agency Fitch Group, said on Tuesday, reported Bloomberg.

The report said that this expansion is being predominantly funded with debt that has put pressure on credit metrics and cash flow. In the worst case scenario, the ports-to-power conglomerate could fall into a debt trap and default, it said.

A default takes place when a company or entity cannot make interest or principal repayments on a debt. This can lead to a lower credit score, which is a measure of the borrower’s creditworthiness.

“We see little evidence of promoter equity capital injections into the group companies, which we feel is needed to reduce leverage in their stretched balance sheets,” the agency said.

The report by CreditSights was published hours before the Adani group said in a regulatory filing that it will acquire 29.18% stakes of news channel NDTV through a subsidiary company.

In the past few years, the Adani group has diversified its interests from coal and ports and expanded into defence, urban water management, small and medium sector lending, power transmission, airports, data centers and cement and green energy sectors.

An investigation by Scroll.in in May 2019 showed that from 2014 to 2019, the Adani Group expanded its operations substantially despite relatively small profits and also at a time when other infrastructure companies were shedding assets.

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CreditSights also flagged a “high key-man risk”, saying the capability of senior management in the absence of Gautam Adani absence may be inadequate for the group, reported Reuters.

Although the report highlighted several areas that may harm Adani’s ambition to expand, the CreditSights analysts said the group was comfortable due to its strong relationships with banks and Prime Minister Narendra Modi’s government.

The report also said that the strong competition between the group and Reliance over market dominance could lead to the conglomerate making “imprudent financial decisions”.