India’s Adani Group sees $30 billion in value wiped off after US indictments

2:38 am Thursday, November 21st, 2024

By Sethuraman N R and Bharath Rajeswaran

(Reuters) – Shares of Adani Group companies lost about $28 billion in market value in morning trade on Thursday after U.S. prosecutors charged the billionaire chairman of the Indian conglomerate in an alleged bribery and fraud scheme.

Gautam Adani’s flagship company Adani Enterprises tumbled 23%, while Adani Ports, Adani Total Gas, Adani Green, Adani Power, Adani Wilmar and Adani Energy Solutions, ACC, Ambuja Cements and NDTV fell between 9% and 20%.

Adani group’s 10 listed stocks had a total market capitalisation of about $141 billion at 0534 GMT, compared to $169.08 billion on Tuesday.

U.S. authorities said Adani and seven other defendants, including his nephew Sagar Adani, agreed to pay about $265 million in bribes to Indian government officials to obtain contracts expected to yield $2 billion of profit over 20 years, and develop India’s largest solar power plant project.

Adani Green in a statement on Thursday said the U.S. Justice Department had issued a criminal indictment against board members Gautam Adani and Sagar Adani and the Securities and Exchange Commission had issued a civil complaint against them.

The U.S. Justice Department also included Adani Green board member Vneet Jaain in the criminal indictment, it said.

Adani Green’s units had decided not to proceed with the proposed U.S.-dollar denominated bond offerings due to developments, it added.

“Investors will shy away from Adani Group stocks … and that’s what this sharp selling is signifying,” said Saurabh Jain, assistant vice president of retail equities research at SMC Global Securities.

“This could hurt the credibility of the group and maybe borrowing costs will rise,” he said.

The indictment comes nearly two years after U.S. shortseller Hindenburg Research alleged that Adani had improperly used tax havens and was involved in stock manipulation, allegations the conglomerate denied.

Also in early Asian trading on Thursday, Adani dollar bonds slumped, with prices down 3c-5c on bonds for Adani Ports and Special Economic Zone [US00652MAJ18=TE]. The falls were the largest since the Adani Group came under a short-seller attack in February 2023.

($1 = 84.4000 Indian rupees)

(This story has been corrected to say that Adani Group shares fell between 9% and 20%, not between 20% and 90%, in paragraph 2)

(Reporting by Sethuraman NR; Editing by Stephen Coates)