FIRMS of India’s Adani Group conglomerate lost as much as US$34 billion in market value on Thursday (Nov 21) after US prosecutors charged its billionaire chairman in an alleged bribery and fraud scheme.
Gautam Adani’s flagship Adani Enterprises tumbled as much as 23 per cent to its lowest since Nov 2023 for its worst one-day drop since February last year.
Other group firms – Adani Ports, Adani Total Gas, Adani Green, Adani Power, Adani Wilmar and Adani Energy Solutions, ACC, Ambuja Cements and NDTV – also fell between 6 per cent and 19 per cent.
The sharp sell-off took down the total market capitalisation of the 10 Adani-backed companies to about US$147 billion by 0854 GMT, from US$169.08 billion on Tuesday.
“Normally investors do not like any lapse of corporate governance and till the time there is clarification, investors will shy away from Adani group stocks,” said Saurabh Jain, a retail equities analyst at SMC Global Securities.
In a statement, Adani Group dismissed the accusations as “baseless and denied”, and vowed to seek “all possible legal recourse”.
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They come within two years of US short-seller Hindenburg Research’s accusations of improper use of tax havens and involvement in stock manipulation by Adani group, which the conglomerate has also denied.
This week US authorities said Adani and seven other defendants, including his nephew Sagar Adani, agreed to pay about US$265 million in bribes to Indian government officials for contracts expected to yield profit of US$2 billion over 20 years, and develop India’s largest solar power project.
The prosecutors added that the Adanis, along with former chief executive Vneet Jaain of Adani Green Energy, raised more than US$3 billion in loans and bonds by hiding their corruption from lenders and investors.
Adani Green Energy, however, cancelled plans to raise US$600 million in US dollar-denominated bonds. The issue had been priced but was pulled after the news.
“The group faces growing challenges in accessing global capital markets amid heightened scrutiny,” said Narinder Wadhwa, managing director of SKI Capital.
“Such withdrawals indicate a defensive posture as the group focuses on mitigating damage.”
In early Asian trade, Adani US dollar bonds slumped, with prices down three cents to five cents on bonds for Adani Ports and Special Economic Zone. They were the largest falls since the short-seller attack of February 2023.
Group firms also dragged down Indian benchmarks on the day, with the NSE Nifty 50 falling 0.75 per cent and the BSE Sensex losing 0.6 per cent. REUTERS
