AGAIN #AdaniGroup

Adani group stocks 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 the opening trade.

Adani Enterprises shares were locked in lower circuit at Rs 2,539.35, down 10 percent. The stock has more than doubled from the post-Hindenburg lows, but is yet to reclaim the prior levels. Adani Green Energy stock was at Rs 1,172.5, down 17 percent. Adani Energy Solutions fell 20 percent to the lower circuit at Rs 697.25.

The Adani Group faces renewed scrutiny as US prosecutors have charged founder 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 allegations have hit Adani group’s international securities too, with Adani’s dollar-denominated bonds falling sharply. Notes issued by Adani Green Energy in March fell 15 cents -- a record, while bonds from Adani Electricity Mumbai due in February 2030 dropped 8.6 cents on the dollar, reported Bloomberg. This marks the steepest fall in the group’s debt securities since the 2023 Hindenburg Research report, which triggered a massive loss of over Rs 12 lakh crore in the combined value of Adani Group stocks and bonds.

The fresh controversy comes as the group has been actively reducing its debt to stabilise 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, and a $500 million share sale by Adani Enterprises in October 2024 to fund new energy projects, establish a PVC plant, and reduce airport unit debt. The group also 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.