Stocks of the Adani group fell on 21 November after US federal prosecutors filed bribery charges on founder Gautam Adani, with Adani Enterprises, Adani Green Energy and Adani Energy Solutions losing as much as 10-20 percent in opening trade.
The stock was traded at a low circuit with Rs 2,539.35, down 10%. The stock has more than doubled since the post-Hindenburg lows, yet still hasn’t reclaimed prior levels. Adani Green Energy stock stood at Rs 1,172.5, down 17%. Adani Energy Solutions fell 20% to the lower circuit at Rs 697.25.
Renewed scrutiny greets the Adani Group as US prosecutors charge founder Gautam Adani of participating in an alleged $250 million (~Rs 2,100 crore) bribery scheme to get solar energy contracts in India. Filed in the Brooklyn, New York court, the indictment charges Gautam Adani, Sagar R Adani, and Vneet S Jaain of orchestrating an elaborate scheme to deceive US investors and violating federal laws.
The allegations also include attempts to obstruct justice by deleting electronic evidence and misleading the Justice Department, Securities and Exchange Commission (SEC), and FBI. In addition to the criminal charges, the SEC has filed a separate civil lawsuit.
These allegations have hit Adani group’s international securities too, with Adani’s dollar-denominated bonds falling sharply. Notes by Adani Green Energy in March declined by a record 15 percent, and those from Adani Electricity Mumbai maturing in February 2030 plunged 8.6 cents on the dollar. That’s the biggest decline since the Hindenburg Research report in 2023, which crashed the value of more than Rs 12 lakh crore worth of stocks and bonds held in the combined value of Adani Group equities.
The fresh controversy comes as the group has been actively slashing its debt to stabilize its financial position. In March 2023, it prepaid Rs 7,374 crore in share-backed financing and agreed to clear all such loans by the end of that month to address concerns over its leverage.
The recent QIP by Adani Energy Solutions raised $1 billion in August 2024 to reduce debt and invest in power infrastructure.
In October 2024, Adani Enterprises conducted a $500 million share sale to fund new energy projects, establish a PVC plant, and reduce the debt of its airport unit. The group also aims at raising at least $1.5 billion through dollar bond issuances under Adani Green Energy and Adani Energy Solutions by early 2025, majorly for debt refinancing.
