The Adani Group, a prominent conglomerate, has recently found itself at the center of a legal storm. US prosecutors have accused founder Gautam Adani of being involved in a significant $250 million bribery scheme. This development has sent shockwaves through the financial markets and raised questions about the group's integrity and business practices.
Impact on Adani Group Stocks and Bonds
On 21 November, Adani group stocks took a hit. Adani Enterprises, Adani Green Energy, and Adani Energy Solutions witnessed losses of up to 10-20 percent in the opening trade. Adani Enterprises shares were locked at Rs 2,539.35, down 10 percent. The stock had more than doubled from the post-Hindenburg lows but was yet to regain its prior levels. Adani Green Energy stock dropped 17 percent to Rs 1,172.5, and Adani Energy Solutions fell 20 percent to the lower circuit at Rs 697.25.These allegations have also affected Adani group's international securities. Adani's dollar-denominated bonds fell sharply. Notes issued by Adani Green Energy in March dropped 15 cents, a record, and bonds from Adani Electricity Mumbai due in February 2030 fell 8.6 cents on the dollar. This marks the steepest fall in the group's debt securities since the 2023 Hindenburg Research report, which led to a massive loss of over Rs 12 lakh crore in the combined value of Adani Group stocks and bonds.Details of the Bribery Allegations
The Adani Group faces renewed scrutiny as US prosecutors have charged Gautam Adani with participating in an alleged $250 million (~Rs 2,100 crore) bribery scheme to secure solar energy contracts in India. The indictment, filed in Brooklyn, New York, accuses Adani, along with Sagar R Adani and Vneet S Jaain, of orchestrating an elaborate scheme involving false statements to US investors and violations of 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 legal actions have put the Adani Group under intense pressure and raised concerns among investors and stakeholders.Group's Efforts to Stabilize Finances
The fresh controversy comes at a time when the group has been actively working to reduce its debt and stabilize its financial position. In March 2023, it prepaid Rs 7,374 crore in share-backed financing and pledged to clear all such loans by the end of that month to address concerns over its leverage.Recent fundraising efforts include a $1 billion QIP by Adani Energy Solutions in August 2024 to reduce debt and invest in power infrastructure. Adani Enterprises also conducted a $500 million share sale in October 2024 to fund new energy projects, establish a PVC plant, and reduce airport unit debt. The group plans to raise at least $1.5 billion through dollar bond issuances under Adani Green Energy and Adani Energy Solutions by early 2025, primarily for debt refinancing. These measures show the group's determination to address its financial challenges and move forward.Disclaimer and Expert Advice
It is important to note that the views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions. This emphasizes the need for careful consideration and due diligence when dealing with the Adani Group and its financial situation.