The Adani Group's access to funding could be hampered after a U.S. arrest warrant was issued for its billionaire founder Gautam Adani over an alleged $265 million bribery scheme, credit analysts said.

Bonds issued by the conglomerate dropped sharply for a second straight day on Friday, although most Adani Group shares stabilised after steep losses a day earlier.

Refinancing for the conglomerate's green energy business, which is at the centre of the allegations, is the biggest concern in the near term, according to research firm CreditSights.

Ratings agency S&P also warned in a statement that the group will need regular access to equity and debt markets given its large growth plans, but it might find fewer takers.

"We believe domestic, as well as some international banks and bond market investors, look at Adani entities as a group, and could set group limits on their exposure," it said.

Some analysts said the fallout was unlikely to be limited to the Adani group.

"India's renewable energy sector, a critical pillar for global climate goals, may face reduced international investment as a result of this controversy," said Nimish Maheshwari, an independent analyst who publishes on Smartkarma.

"Investors may demand greater transparency and due diligence, slowing down the pace of project financing."

U.S. prosecutors have charged Adani and seven other people with agreeing to pay bribes to Indian government officials to obtain contracts that could yield $2 billion of profit over 20 years as well as to develop India's largest solar power plant project.

Adani Group has said the accusations levelled by U.S. federal prosecutors as well as by the U.S. Securities and Exchange Commission in a parallel civil case are "baseless and denied" and that it will seek "all possible legal recourse".

Falls for Adani dollar bond prices on Friday included a 2.5c drop on the dollar for 2029 Adani Ports and Special Economic Zone bonds. At 87.8c, they are down more than 5c over the two sessions.

Longer-dated maturities have fallen around 5c in two days and trade just below 80c.

Adani Transmission and Adani Electricity Mumbai bond prices also had similar declines.

Though most Adani firms managed to claw back some of Thursday's losses, the stocks have seen their combined market value drop by $23 billion.

Investors are also watching to see if more Adani deals could be scuttled in the wake of the indictments.

Kenya has cancelled a procurement process worth nearly $2 billion that had been widely expected to award control of the country's main airport to the Adani Group.

It also nixed a separate 30-year, $736-million public-private partnership deal that an Adani Group firm signed with the energy ministry last month to construct power transmission lines.

Adani Green Energy also cancelled a scheduled $600 million U.S. bond sale.

U.S. prosecutors say Adani, his nephew Sagar Adani and others bribed Indian officials to gain business advantages in renewable energy projects in India that benefitted Adani Green and a company called Azure Power, which was listed on the New York Stock Exchange until late 2023.

They are also accused of making misleading statements to the public including U.S. investors despite being made aware of the U.S. investigation in 2023.

Adani has not appeared in public or commented on social media since the indictment and his whereabouts remain unclear.

Indian authorities have not responded to opposition calls for a probe into allegations of wrongdoing by the Adani Group.

The indictment came not long after Adani raised $1.5 billion through two share sales by flagship firm Adani Enterprises and power distribution arm Adani Energy Solutions .

(Reporting by Scott Murdoch and Tom Westbrook; Additional reporting by Chris Thomas, Aditya Kalra and Krishna Das; Editing by Edwina Gibbs)