Adani Group Stocks Plummet Up to 20% Following U.S. Indictment of Gautam Adani on Bribery and Fraud Charges
The Adani Group experienced a significant downturn in its stock performance on Thursday, with shares plummeting up to 20% following the indictment of Chairman Gautam Adani and seven associates by U.S. authorities. The charges allege involvement in a multibillion-dollar bribery and fraud scheme aimed at securing solar energy contracts through illicit payments to Indian officials.
— Adani Group (@AdaniOnline) November 21, 2024
Market Impact: Substantial Losses Across Adani Entities
The flagship entity, Adani Enterprises, saw its share price decline by 20%, while Adani Energy Solutions mirrored this drop. Other group companies, including Adani Green Energy, Adani Total Gas, Adani Power, and Adani Ports, experienced declines ranging from approximately 15% to 19%. Additionally, Ambuja Cements, ACC, NDTV, and Adani Wilmar reported significant losses, with some stocks hitting their lower circuit limits during trading.
This sharp decline resulted in a reduction of the group’s total market capitalization by approximately ₹2.25 lakh crore, bringing it down to ₹12 lakh crore. Consequently, Gautam Adani’s personal wealth decreased by $10.5 billion, settling at $59.3 billion, as per Forbes’ Real-Time Billionaires List.
Credit Rating Concerns
In response to these developments, Moody’s Ratings expressed concerns regarding the credit standing of Adani Group companies. The agency stated, “The indictment of Adani Group’s chairman and other senior officials on bribery charges is credit negative for the group’s companies. 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.”
Investor confidence was further shaken as GQG Partners, a significant investor in the Adani Group, saw its shares decline by 26% on the Australian exchange.
Legal Proceedings
The U.S. Securities and Exchange Commission (SEC) has filed charges against Gautam Adani and his associates, alleging a scheme involving bribery to secure solar energy contracts. The indictment suggests that the group engaged in fraudulent activities to obtain favorable contracts, thereby misleading investors and stakeholders.
In light of these allegations, Adani Green Energy withdrew its proposal to raise $600 million through U.S. dollar-denominated bonds, indicating a reassessment of its financial strategies amidst the ongoing legal challenges.
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