Adani Group stocks faced a significant hit on November 21, 2024, after US prosecutors filed bribery and fraud charges against Gautam Adani, the founder of the group, and seven others. It is alleged that the group was involved in a bribery scheme worth $250 million (around ₹2,100 crore) to obtain solar energy contracts in India. This development has raised concerns among investors and triggered a sharp decline in the group’s stock prices.
The US Department of Justice has accused Gautam Adani and key associates, including Sagar R Adani and Vneet S Jaain, of engaging in illegal activities to win solar energy contracts in India. According to the charges, the group allegedly made false statements to US investors and violated federal laws.
The indictment, filed in Brooklyn, New York, also mentions attempts to obstruct justice. These include deleting electronic evidence and misleading the US Justice Department, Securities and Exchange Commission (SEC), and the Federal Bureau of Investigation (FBI). In addition to criminal charges, the SEC has filed a civil lawsuit against the group.
Impact on Adani Group Stocks
Following the news, Adani Group stocks experienced a massive sell-off. Key companies in the group saw steep declines in their stock prices:
- Adani Enterprises: The stock hit its lower circuit limit at ₹2,539.35, marking a 10% drop. While it has recovered from its post-Hindenburg lows, it remains far from its previous highs.
- Adani Green Energy: The share price dropped by 17% to ₹1,172.50.
- Adani Energy Solutions: The stock fell 20% to ₹697.25, also hitting its lower circuit.
The negative sentiment wasn’t limited to Indian markets. Adani Group’s international bonds also suffered significant losses. For example, bonds issued by Adani Green Energy fell by 15 cents on the dollar, setting a record low. Bonds from Adani Electricity Mumbai, due in February 2030, dropped by 8.6 cents.
The bribery allegations have renewed scrutiny of the Adani Group’s corporate governance practices. For many investors, this news comes as a shock, The allegations have reignited questions about the Adani Group’s corporate governance and transparency. The charges cast doubt on the group’s stability and ethical practices, raising concerns for investors.
The bribery charges against Gautam Adani and others have placed the Adani Group under intense scrutiny. With sharp declines in stock and bond prices, investors are advised to monitor the developments closely. This case could have a long-lasting impact on the Adani Group’s business operations and investor trust.
