Massive Sell-Off Hits Adani Stocks; U.S. Prosecutors and Adani Group Lock Horns Over Allegations
The Adani Group, one of India’s largest conglomerates, is under fire after U.S. prosecutors accused it of orchestrating a $265 million (approximately ₹2,200 crore) bribery scheme to secure favorable solar power contracts. The allegations have sparked a market rout, with the combined market capitalization of Adani’s ten listed companies plunging ₹2.19 lakh crore on Thursday.
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The Allegations: A High-Stakes Scandal
U.S. prosecutors, supported by the SEC, allege that Adani Green Energy paid substantial bribes to unidentified Indian officials in Andhra Pradesh and Odisha. The goal was to secure preferential terms for solar energy contracts that could yield profits exceeding $2 billion over two decades.
Key Details of the Case:
| Aspect | Details |
|---|---|
| Bribe Amount | $265 million (₹2,200 crore) |
| Objective | Preferential terms for solar contracts |
| States Involved | Andhra Pradesh, Odisha |
| Potential Gains | Over $2 billion profit across 20 years |
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The bribery charges come as Adani continues to face fallout from the Hindenburg Research report earlier this year, which accused the conglomerate of stock manipulation and financial misrepresentation.
Adani Group’s Rebuttal: Denial and Legal Preparations
In a strongly worded statement, the Adani Group dismissed the allegations as “baseless.” A spokesperson for the conglomerate stated:
“The allegations made by the U.S. Department of Justice and the SEC against directors of Adani Green are baseless and denied. We remain compliant with all applicable laws and will pursue all available legal options.”
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The group has pledged to defend itself vigorously while continuing its operations across key sectors.
Market Bloodbath: Adani Stocks Plunge
The bribery allegations triggered panic selling, with all ten Adani-listed companies suffering significant losses on the Bombay Stock Exchange (BSE).
| Company | Price Decline (%) |
|---|---|
| Adani Enterprises | -22.61% |
| Adani Energy Solutions | -20.00% |
| Adani Green Energy | -18.80% |
| Adani Ports | -13.53% |
| Ambuja Cements | -11.98% |
| Adani Total Gas | -10.40% |
| Adani Wilmar | -9.98% |
| Adani Power | -9.15% |
| ACC | -7.29% |
| NDTV | -0.06% |
The broader markets also took a hit, with the BSE Sensex falling 422.59 points (0.54%) to close at 77,155.79, and the NSE Nifty dropping 168.60 points (0.72%) to 23,349.90.
Ripple Effects Across Sectors
1. Institutional Investors
Life Insurance Corporation of India (LIC), which has a significant stake in Adani stocks, faced a staggering loss of ₹7,847 crore.
2. Banking Sector
Public sector banks like SBI and PNB experienced stock declines of up to 7%, reflecting market concerns over their exposure to Adani loans.
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3. Global Confidence
GQG Partners, a major international investor in Adani stocks, reported a 20% drop in portfolio value, highlighting potential risks for foreign investors in Indian markets.
Timeline of Events: Bribery Allegations Unfold
| Date | Event |
|---|---|
| June 2020 | Adani Green secures a record-breaking 8,000 MW solar tender from SECI. |
| December 2021 | Adani Green signs agreements for 4,667 MW of power purchase. |
| November 20, 2024 | U.S. DOJ and SEC indict Adani Group on bribery charges. |
| November 21, 2024 | Adani stocks witness a historic sell-off, erasing ₹2.19 lakh crore in market value. |
Expert Views and Market Analysis
Prashanth Tapse, Senior VP (Research) at Mehta Equities, remarked, “While the market is in the midst of a bear hug for the past few weeks, today’s fall can also be attributed to the news of the Adani Group facing bribery charges, which triggered a massive sell-off in its group stocks.”
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Analysts warn that this incident could have long-term implications for India’s renewable energy sector, where Adani is a leading player.
International Implications
The allegations could complicate India-U.S. trade relations, especially as both countries push for closer collaboration on renewable energy. The case also raises questions about corporate governance in India, with global investors calling for stricter regulatory oversight.
Looking Ahead: What Lies Ahead for Adani?
As U.S. authorities proceed with legal action, Adani faces an uphill battle to restore its reputation and investor confidence. The group’s solar energy ambitions, a cornerstone of India’s renewable energy goals, could face significant delays.
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With allegations of financial impropriety mounting, Adani’s future remains uncertain, marking a critical moment for the conglomerate and India’s corporate landscape.
