Adani Group stocks plunge up to 20% after Gautam Adani charged with bribery and fraud in the US

US authorities disclosed on Wednesday (Nov. 20) that the group allegedly bribed Indian officials to secure lucrative solar energy contracts. 

The flagship company, Adani Enterprises, saw a steep 20 percent drop in its share price.

Adani Energy Solutions faced a similar plunge, while Adani Green Energy fell by 19.17 percent, Adani Total Gas by 18.14 percent, Adani Power by 17.79 percent, and Adani Ports by 15 percent. 

Other companies within the conglomerate also experienced severe losses: Ambuja Cements declined by 14.99 percent, ACC by 14.54 percent, NDTV by 14.37 percent, and Adani Wilmar by 10 percent.

Several stocks hit their daily lower circuit limits during trading. 

The combined market capitalization of Adani Group's 11 publicly listed companies dropped by Rs 2 lakh crore, reducing the group's valuation to Rs 12.3 lakh crore.

This marked its worst trading day since the Hindenburg Research allegations earlier in 2023. 

Gautam Adani’s personal fortune also took a significant hit, with a $10.5 billion loss, bringing his net worth to $59.3 billion, according to Forbes’ Real-Time Billionaires List. 

Moody’s Ratings labeled the developments as "credit negative" for the Adani Group, highlighting concerns over the conglomerate's governance practices and its ability to access capital.

In a statement, Moody's emphasised: "The indictment of the chairman and other senior officials raises questions about the group’s liquidity and overall governance."

GQG Partners, a key investor in Adani Group post-Hindenburg, saw its shares fall by 26 percent on the Australian stock exchange.

Meanwhile, Adani’s dollar-denominated bonds recorded their sharpest declines since February 2023, with Adani Ports bonds dropping by 3-5 cents. 

Adani Green Energy also withdrew a planned $600 million bond issuance, citing recent developments despite initially setting pricing terms. 

The US Securities and Exchange Commission (SEC) accused Gautam Adani, his nephew Sagar Adani, and other executives of defrauding American investors and bribing officials.

According to the indictment, the group paid $265 million in bribes, expecting to earn $2 billion in profits over two decades. 

Court filings revealed the use of code names like "Numero Uno" and "The Big Man" for Gautam Adani.

Arrest warrants have been issued for Gautam and Sagar Adani, with prosecutors seeking assistance from international law enforcement agencies. 

The charges include securities fraud, conspiracy to commit securities fraud, and wire fraud.

A civil lawsuit has also been filed by the SEC against Gautam Adani and his associates. 

This crisis poses a significant challenge to the Adani Group’s financial stability and credibility.

The fallout could further affect its ability to raise capital and pursue ongoing infrastructure and energy projects.