Adani Group companies bribery charge : Following the charges, shares of Adani Group have crashed by up to 20%, with Adani Green down 18% on the Bombay Stock Exchange (BSE).
Allegations and Legal Challenges
Adani stocks today: Share price of Adani Group companies crashed sharply by up to 20% on Thursday following changes against Gautam Adani and seven others in the United States (US) regarding a multi-billion-dollar bribery and fraud scheme. The US authorities revealed on Wednesday that the group allegedly bribed Indian officials for securing solar energy contracts.
Charges filed by the US DOJ and SEC
Adani Group has cancelled its USD 600 million bond offering after US prosecutors accused Gautam Adani and other executives of orchestrating a USD 250 million bribery scheme. The charges, filed by the US Department of Justice(DOJ) and the Security and Exchange Commission (SEC), caused Adani’s US dollar bonds to drop sharply in Asian trading, with some securities falling as much as 15 cents.
Alleged bribery to secure solar energy contracts
The group abandoned the bond sale just hours after it had been priced, citing legal developments.The indictment alleged that Adani executives bribed India officials to secure high- value solar energy contracts.
Additionally, Ambuja cements recorded a significant fall of 14.99%, whilst ACC shares dropped by 14.54%. NDTV share plunged by 14.37% and Andani Wilmar observed a 10% decrease in its value. Several companies within the group reached their daily lower circuit limits during the trading session.
Broader Market Impact
Banking sector shares drop: SBI, PNB, and others
Share of SBI plunged by 3.65%, PNB 4.34%, Bank of Baroda 4.24%, Canara Bank 3.99% and Union Bank 2.25%. The public sector lender IREDA declined by 2.37%, Power Finance Corp 4.46% and REC 4.47% in the morning session.
Benchmark indices Sensex and Nifty decline
Adani Green Energy plunged by 17.51%, Adani Energy Solutions by 20%, Adani Enterprises by 21.07%, Adani Power by 12.13%, Adani Total Gas 13.75% and Andani Ports by 1917% in the morning session.
Adani share dragged the benchmark Sensex by 518 point to 77,061.29 and the NSE Nifty fell by 182 points to 23,335.80 on selling pressure at 11.00 am IST.
Historical Context and Ongoing Risks
Fallout from Hindenburg allegations in 2023
Adani weather the Hindenburg allegations, these changes highlight ongoing governance and regulatory risks,” said Mohit Mirpuri, a fund manager at Singapore-based SGMC Capital, in remarks to Bloomberg.
In the Asian trading session, Adani dollar bonds explained significant declines, with Adani Pors and Special Economic Zone bonds dropping by 3-5 cents. These declines market the steepest fall since the organisation faced short-seller allegations in 2023.
Governance and regulatory scrutiny continues
The indictment adds of the group challenges following a tumultuous period since 2023, when the Hindenburg Research report accused Adani of stock manipulation and frand, erasing $150 billion in market value.
Future Uncertainty
The Securities and Exchange Commission Wednesday charged Gautam Adani and Sagar Adani, executives of Adani Green Energy Ltd. and Cyril Cabanes, an executive of Azure Power Global Ltd., with conduct arising out of a massive bribery scheme. The SEC filed both the complaints in the US District Court for the Eastern District of New York.
Future Uncertainty
On Wednesday, Adani disclosed a green energy investment. The disclosure coincided with the company chairman’s congratulatory message to the U.S. President-elect Donald Trump. “Adani announced the investment while also congratulating U.S. President-elect Donald Trump on his election win,” according to Reuters. Trump’s administration has pledged to reduce regulations for energy companies, facilitating drilling operations on federal and pipeline construction.
Investor concerns about financial stability
Existing Adani Green Energy bonds issued in March 2024 sank to record lows, trading at 80 cent on the dollar, signaling investor unease. Other group securities mirrored these declines, compounding concerns over governance and financial stability.
The Adanis face a civil lawsuit filed by the U.S. Securities and Exchange Commission.