Adani Group stocks took a sharp hit on November 21, 2024, following the news of US federal prosecutors charging founder Gautam Adani with bribery and fraud. Key group entities, including Adani Enterprises, Adani Green Energy, and Adani Energy Solutions, saw their shares plummet by 10-20% during early trading.
The indictment, filed in Brooklyn, New York, accuses Gautam Adani, along with executives Sagar R Adani, Vneet S Jaain, of engaging in a $250 million (~₹2,100 crore) bribery scheme to secure solar energy contracts in India. The charges include securities fraud, wire fraud, and violations of the Foreign Corrupt Practices Act (FCPA), alongside allegations of obstructing justice by tampering with electronic evidence and misleading US agencies, including the Justice Department, Securities and Exchange Commission (SEC), and FBI.
Stock Market Impact
Adani Enterprises’ shares hit the lower circuit at ₹2,539.35, registering a 10% drop. Despite recovering significantly since the lows caused by the Hindenburg Research report earlier this year, the stock remains far from its pre-crisis levels. Adani Green Energy tumbled by 17% to ₹1,172.5, while Adani Energy Solutions plunged 20% to ₹697.25.
The ripple effect extended beyond domestic markets, with Adani’s dollar denominated bonds also facing sharp declines. Bonds from Adani Electricity Mumbai, maturing in February 2030, dropped 8.6 cents on the dollar, marking the steepest fall in the group’s debt securities since the Hindenburg controversy, which had wiped out over ₹12 lakh crore from the Adani Group’s combined market value.
The fresh allegations come as the Adani Group has been actively working to reduce its debt and restore investor confidence. Earlier this year, the group prepaid ₹7,374 crore in share-backed financing and pledged to eliminate such loans by March 2023. These measures were part of broader efforts to address concerns about its financial stability following the Hindenburg allegations.
In recent months, the group has focused on fundraising to strengthen its balance sheet. Adani Energy Solutions raised $1 billion through a Qualified Institutional Placement (QIP) in August 2024, while Adani Enterprises secured $500 million via a share sale in October to finance energy projects, reduce debt at its airport unit, and set up a PVC plant.
Additionally, the group plans to issue at least $1.5 billion in dollar bonds through Adani Green Energy and Adani Energy Solutions by early 2025, primarily for refinancing debt. The SEC has also filed a civil lawsuit against the group, adding to the growing legal pressure.
