Adani stocks tumble, hit lower circuit on US bribery, fraud charges

Adani Group’s listed firms fell sharply on Thursday, with several shares hitting their lower circuits after U.S. authorities accused Chairman Gautam Adani of engaging in a multimillion-dollar bribery and fraud scheme. 

U.S. prosecutors said on Wednesday evening that Adani and seven other individuals, including his nephew Sagar Adani, had paid over $250 million in bribes to Indian government officials between 2020 and 2024. 

The bribes were paid to land government contracts to develop solar power projects, and were expected to yield $2 billion in profit over 20 years. U.S. authorities claimed that Adani had also misled investors and lenders when raising over $3 billion in loans. 

Adani Enterprises Ltd (NS:ADEL )- the flagship listed unit of the conglomerate, slid 10%, as did Adani Ports and Special Economic Zone Ltd (NS:APSE ), with both stocks hitting a lower circuit breaker that paused trade.

Adani Green Energy Ltd (NS:ADNA ) slid 18% after reports said it had scrapped a planned $600 million bond sale after the U.S. allegations. Adani Energy Solutions Ltd (NS:ADAI ) slid 20%. Adani Wilmar Ltd (NS:ADAW ) lost over 9%, while Adani Power Ltd (NS:ADAN ) and Adani Total (EPA:TTEF ) Gas Ltd (NS:ADAG ) lost around 14% each. 

Adani Enterprises and Adani Ports were the biggest weights on India’s benchmark Nifty 50 index, which fell 0.9% to an over five-month low. The index was also nursing a tumble into correction territory from recent record highs.

The U.S. allegations herald a fresh round of regulatory trouble for Adani, and hamper its plans to expand abroad and issue debt in international markets.

Wednesday’s allegations also come nearly two years after a short seller report from Hindenburg Research, which had accused Adani of similar schemes. The report had sparked scrutiny from U.S. and Indian regulators against Adani, although India’s securities regulator claimed to have found little wrongdoing.

Shares of companies under the Adani Group had lost more than a combined $100 billion after the Hindenburg report in early-2023. But they have since recouped most of their losses. 

Adani Enterprises shares are trading down nearly 13% so far in 2024. 

Source: Investing.com