The Stock Market Impact
In a dramatic turn of events for the Adani Group, stocks took a nosedive on November 21, 2024, leading to a whopping loss of ₹2.45 lakh crore ($30 billion) in market value. The steep decline in shares came on the heels of accusations by US prosecutors charging Gautam Adani and his associates with a $250 million bribery scandal. This marked the group's worst stock market performance since the notorious 2023 Hindenburg Research episode.
Individual stocks within the Adani conglomerate faced significant blows. Adani Energy Solutions hit a 20% lower circuit at ₹697.70, and Adani Green Energy experienced a sharp 17.4% drop to ₹1,172.50. Meanwhile, Adani Enterprises faced its steepest decline since early 2023, plummeting 23% to ₹2,182.55. Other group stocks also suffered losses: Adani Ports fell by 10%, Ambuja Cements by 15%, ACC by 12.69%, and Adani Wilmar by 10%.
Charges and Reactions
The storm surrounding the Adani Group was intensified by allegations from the US Securities and Exchange Commission (SEC). Gautam Adani, alongside his nephew Sagar Adani and former Adani Green CEO Vneet Jaain, was accused of bribing Indian officials to land lucrative solar contracts, alleged to generate $2 billion over a span of 20 years. Prosecutors claimed illicit tactics were employed to secure $3 billion in loans and bonds, supposedly masked by corrupt practices. Internally, various code names like 'Numero uno' and 'the big man' were reportedly used to refer to Gautam Adani.
In response, the Adani Group denied the allegations, branding them as 'baseless' and 'without merit.' They asserted their compliance with legal standards and promised cooperation with the ongoing investigations. Yet, the ripple effects were broad, with Adani Green's dollar bonds dropping 15 cents, marking the steepest decline since March 2023. Key investor GQG Partners announced it would be reviewing its holdings in Adani companies.
Adding to the pressure, Moody's credit agency labeled the charges as 'credit negative,' raising concerns about the group's access to capital and its governance standards. This particular situation stirred discussions about corporate governance practices and international confidence in Adani Group's dealings.
The unfolding crisis created further challenges for the Adani Group as it tried to steady its finances following the setbacks of 2023. Amid tracking this complex narrative of allegations and market reactions, questions linger about how the group will restore trust among global investors and navigate the turbulent waters ahead.