By Adani Group stocks experienced a sharp and widespread selloff on Thursday after US prosecutors announced bribery and fraud charges against Gautam Adani and seven associates.
The charges, unveiled late Wednesday, allege that Adani and his executives engaged in a multibillion-dollar scheme involving bribery to secure solar energy contracts in India.
Adani Energy Solutions bore the brunt of the market reaction, with shares plummeting 20%.
Adani Green Energy followed closely, dropping 18%. Adani Total Gas and Adani Power fell by 13-14%, while flagship companies such as Adani Enterprises, Ambuja Cements, ACC, and Adani Ports were locked in at their 10% lower circuit limits.
Other subsidiaries, including NDTV (-11%), Adani Wilmar (-8%), and Sanghi Industries (-6%), also faced significant losses, reflecting the ripple effect across the conglomerate.
Adani Green bond offering scrapped amid fallout
Amid the legal and market turbulence, Adani Green Energy cancelled plans of a $600 million bond issuance scheduled for Thursday.
Adani Green Energy’s dollar bonds issued in March dropped a record 15 cents, hitting a low of 80 cents, as per Bloomberg data.
Bonds from other Adani Group entities also saw significant declines, with some falling to as low as 74 cents—their steepest drop since the 2023 Hindenburg Research report.
“While Adani has demonstrated resilience in handling previous allegations, including those from Hindenburg, this incident highlights the ongoing risks tied to emerging markets, particularly regarding governance, transparency, and regulatory oversight,” said Mohit Mirpuri, a fund manager at Singapore-based SGMC Capital Pte in a Bloomberg report.
Bribery allegations against Adani and nephew explained
The indictment filed by the US Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) outlines serious accusations against Adani, his nephew Sagar Adani, and other executives.
They are charged with conspiring to defraud US investors and global financial institutions through false representations.
According to the indictment, the group paid $265 million in bribes to Indian officials to secure state solar energy contracts.
The prosecutors claim these contracts were projected to generate $2 billion in profits over 20 years.
Some participants in the scheme allegedly referred to Gautam Adani by code names such as “Numero uno” and “the big man.”
The bribes were reportedly concealed from lenders and investors to secure over $3 billion in loans and bonds for Adani Green Energy.
The charges fall under the Foreign Corrupt Practices Act (FCPA), which targets corruption and bribery in international business dealings.
Deputy Assistant Attorney General Lisa H. Miller called the allegations a “massive fraud,” stating, “This indictment alleges schemes to pay over $250 million in bribes, lie to investors and banks to raise billions of dollars, and obstruct justice.”
A second major blow for Adani Group
This development marks another significant setback for Gautam Adani, whose business empire has been under fire since the January 2023 Hindenburg Research report accused the group of financial misconduct.
That report led to a staggering $150 billion loss in market capitalization across Adani’s companies.
Gautam Adani, ranked by Forbes as the 22nd richest person globally with a net worth of $69.8 billion, now faces not only financial challenges but also potential legal consequences.
Reports indicate that arrest warrants have been issued for Gautam Adani and his nephew Sagar Adani, compounding the group’s troubles.
What’s next for Adani Group?
The allegations have cast a long shadow over Adani Group’s global operations and its access to international capital markets.
It could also intensify foreign fund withdrawals, which have already reached record levels since October.
“Foreign investor sentiment could be affected if the investigation escalates,” Manish Bhargava, CEO of Straits Investment Management told Bloomberg, adding that the case heightens reputational risks for the group.
The charges came on the heels of Adani announcing a fresh investment in green energy and congratulating US President-elect Donald Trump on his election victory.
Trump, known for his pro-energy deregulation stance, has pledged to simplify rules for energy companies, including those operating in renewable sectors.
As the case progresses, its trajectory will likely depend on the incoming Trump administration.
Breon Peace, the Brooklyn US attorney appointed under Biden, is expected to step down.
“It’s unusual for charges like this to emerge during a transition of power,” said Gary Dugan, CEO of Global CIO Office. “The hope is that Donald Trump dismisses it once in office.”
The Adani Group has not yet issued a statement in response to the charges, but analysts predict extended volatility for its stocks and bonds as the legal process unfolds.
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