Bernstein India's head of research has shrugged off concerns over the impact of the bribery allegations against Gautam Adani and other Adani Group executives on the Indian markets. Venugopal Garre described the market reaction as likely short-term, while benchmark share market indices NSE Nifty 50 and BSE Sensex fell as much as 1.1 percent intraday, led by losses in largest Adani Group stocks.
“These incidents are not specific to India. Such incidents tend to be short-term in nature given the nature of the infrastructure business,” said Venugopal Garre of Bernstein India on CNBC TV18.
At close, the Sensex was down 423 points or 0.5 percent at 77,156, and the Nifty was down 169 points or 0.7 percent at 23,350. Nifty PSU Bank, Nifty Metal and Nifty Energy indices were among the major losers, falling 2-3 percent each.
Garre said that markets are likely to move past the news within a day or a week. “We wouldn’t read too much into the Adani Group news,” adding that the firm is not anchoring its view on the Indian market based on these developments.
Adani Group stocks were among those hit hardest after US prosecutors alleged Gautam Adani participated in a $250 million bribery scheme to secure solar energy contracts in India. The indictment, which also accused Adani executives of obstructing justice, triggered a sell-off not just in equities but also in Adani’s dollar-denominated bonds, accentuating the fallout.
Adani Enterprises shares fell 24 percent to an intraday low of 2,155, before closing at Rs 2,184. Adani Green Energy stock fell 20 percent to Rs 1,132. Adani Energy Solutions shares fell 20 percent to end the day at the lower circuit at Rs 697.25.
Nevertheless, Garre suggested that the news is unlikely to have lasting consequences for the broader market.
On the other hand, Bernstein focused on the broader solar sector, with Garre flagging signs of overvaluation in some solar energy stocks. Even so, he highlighted the sector's potential draw for investors looking for high growth opportunities: “Investors see solar energy as a domestic opportunity but also as an export opportunity.”
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