Shares of select Adani Group companies extended their recovery from the previous session and gained as much as 6 percent on November 25. Largecap names like Adani Enterprises and Adani Ports and Special Economic Zone surged 4 percent and 5 percent, respectively, to the day's highs.
Meanwhile, others like Adani Power, Adani Green Energy and Adani Wilmar also witnessed buying from lower levels which lifted these stocks 3-6 percent higher. However, all of these stocks soon came off their day's highs.
While shares of Adani Enterprises, Adani Ports and Adani Wilmar were still trading 1-3 percent higher, Adani Power and Adani Green slipped into the red, down 2 percent and 7 percent, respectively.
This comes after most Adani stocks saw a modest recovery on Friday, following a sharp selloff on November 21 that wiped out Rs 2.2 lakh crore in market capitalization of the conglomerate. That session marked one of the steepest single-day declines in the group's history, with Adani Enterprises plummeting 23 percent, and Adani Green Energy and Adani Energy Solutions falling 20 percent each.
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The sharp selloff stemmed from allegations by US prosecutors that Gautam Adani and other executives orchestrated a $250 million bribery scheme to secure solar contracts in India, intensifying concerns over the group's governance and financial stability.
Further adding to the pressure, S&P Global Ratings downgraded the outlook for three Adani Group entities—Adani Electricity Mumbai Ltd, Adani Ports and Special Economic Zone Ltd, and Adani Green Energy Ltd Restricted Group 2—to negative, although it affirmed their ratings. S&P also warned that cash flows could be significantly impacted if the allegations are proven, or if funding costs rise or access to funding weakens. The ratings agency also cautioned that banks and bond investors might impose exposure limits, affecting the group's ability to raise funds for its growth and refinancing needs.
Despite the recovery in stock prices of most Adani group companies, its struggles seems far from over. Amid the indictment from the US Court, the national review committee of Bangladesh's power and energy ministry has also recommended a review of major power contracts awarded under the Sheikh Hasina regime, including those given out to the Adani Group.
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