Adani Group shares nosedived more than 23% on Thursday and the conglomerate's combined market capitalisation of the 10 listed group stocks declined by about Rs 2.8 lakh crore during the trading hours after Adani Group’s chairman Gautam Adani was indicted in the United States over bribery and fraud charges
Shares of flagship firm Adani Enterprises fell 23.44% to close at Rs 2,159 apiece on the BSE.
Adani Green Energy plunged 18% to Rs 1,145 while Adani Ports settled 13.11% lower at Rs 1,120. Adani Energy Solutions cracked 20% to close at Rs 697.70. Adani Total Gas fell 10.35% to Rs 602.65, and Adani Power slipped 9.55% to Rs 474. Adani Wilmar tanked 10%, ACC Cement 8%, Ambuja Cement 12.5% and NDTV 0.5%.
Shares of banking firms, which have exposure to Adani Group companies were also under severe pressure. State Bank of India (SBI), Bank of Baroda (BoB), and Punjab National Bank (PNB) fell over 7% intraday on Thursday. India’s equity market benchmark NSE Nifty fell 0.71% and BSE Sensex fell 0.51% on Thursday.
Meanwhile, shares of US-based investment firm GQG Partners fell 20% on Tuesday. GQG is an investor in Adani Group companies.
The US prosecutors charged Gautam Adani, his nephew Sagar Adani and other defendants for paying $265 million in bribes between 2020 and 2024 to Indian government officials to win solar energy contracts on terms that could potentially bring in more than $2 billion in profit. This, they alleged, was concealed from the US banks and investors from whom the Adani group raised billions of dollars for the project.
Adani Group said that the allegations made by the US Department of Justice and the US Securities and Exchange Commission against directors of Adani Green are baseless and denied. The Group said in a statement that all possible legal recourse will be sought.
Moody's Ratings on Thursday said it will look at Adani group's governance practices when assessing the ports-to-energy conglomerate's ability to access capital in the aftermath of the inducement of the group head Gautam Adani on bribery charges.
"The indictment of Adani Group's chairman and other senior officials on bribery charges is credit negative for the group's companies," Moody's Ratings said in a statement. “Our main focus when assessing Adani Group is on the ability of the group's companies to access capital to meet their liquidity requirements and on its governance practices," Moody's added.
US law allows pursuing foreign corruption allegations if they involve certain links to American investors or markets. “The defendants orchestrated an elaborate scheme to bribe Indian government officials to secure contracts worth billions of dollars,” Breon Peace, US Attorney for the Eastern District of New York, which brought the case, said in a statement.
Adani, his nephew Sagar R Adani, who is an executive director at the conglomerate’s renewable energy arm Adani Green Energy Ltd, and its former CEO Vneet Jaain were charged with securities fraud, securities fraud conspiracy and wire fraud conspiracy. The Adanis were also charged in a US Securities and Exchange Commission (SEC) civil case.
Adani Group said that they have always upheld and are steadfastly committed to maintaining the highest standards of governance, transparency and regulatory compliance across all jurisdictions of its operations.
Adani Group is facing another challenge to come clean after US-based short-seller Hindenburg had last year accused them of stock price manipulation via improper use of tax havens. The serious allegations, which had earlier wiped out the Group’s m-cap by about Rs 12 lakh crore, were denied by the conglomerate.
