Adani Group Stocks crash up to 20% after US Authorities indicate Bribery Charges
Adani Group stocks fell sharply on Thursday, November 21, after a criminal indictment was unsealed in New York against the chairman and some executives. The indictment, alleging a multibillion-dollar bribery and fraud scheme, triggered massive sell-offs in the stock market.
Allegations of Bribery and Fraud Scheme
US officials stated that the indictment revealed that more than $250 million in bribes were promised to Indian government officials to secure solar energy contracts. Filed in the Eastern District of New York, the five-count indictment charged senior executives with conspiring to commit securities and wire fraud, along with making false statements to obtain funds from US investors and global financial institutions.
Other individuals implicated included former executives of a renewable energy company and employees of a Canadian institutional investor. They were charged with conspiring to violate the Foreign Corrupt Practices Act as part of the bribery scheme connected with one of the world’s largest solar energy projects.
Market Impact on Adani Group Stocks
The allegations triggered a sharp decline across multiple Adani Group stocks. Key stocks such as Adani Energy Solutions, Adani Enterprises, Adani Ports and Special Economic Zone hit their respective lower circuits on the Bombay Stock Exchange. Adani Energy Solutions plunged 20% to Rs. 697.70, while Adani Enterprises and Adani Ports both fell by 10%, closing at Rs. 2,538.20 and Rs. 1,160.15, respectively.
Other group stocks, including Adani Green Energy, Adani Power, and Adani Total Gas, saw declines of up to 19%, while Adani Wilmar dropped 10%. Shares of Ambuja Cements, ACC, and NDTV also recorded double-digit losses, plummeting by 10%, 15%, and 14%, respectively.
The losses extended beyond India, as Australia-listed GQG Partners, a significant shareholder in Adani Group stocks, saw its shares drop by 20%.
Market Capitalisation Wiped Out
The sharp sell-off wiped out approximately Rs. 2 lakh crore of market capitalisation for the Adani Group, reducing it from Rs. 14.31 lakh crore to Rs. 12.43 lakh crore. Data from the capital market highlighted the significant losses investors faced in just one trading session.
Financial Implications and Scrapping of Bonds
The indictment had immediate financial repercussions for the group. A planned $600 million bond issuance was cancelled after the charges were announced. Furthermore, the group’s outstanding US currency notes saw sharp declines during Asian trading hours.
This is not the first time the Adani Group has faced controversy. In January last year, a US short-seller report accused the conglomerate of misusing offshore tax havens. That report led to an extensive sell-off and wiped out nearly $150 billion in market value across the group’s stocks.
The recent scandal has reignited concerns over corporate governance within the group, significantly impacting share prices and investor confidence.
