The fallout from US prosecutors charging Gautam Adani with participating in a $250 million bribery scheme has rippled across markets, hitting Adani Group stocks, bank shares, and other companies with ties to the conglomerate. The allegations have triggered sharp declines across equities, bonds, and related securities, weighing on the market sentiment.
Adani Enterprises, Adani Green Energy, and Adani Energy Solutions shares fell up to 25 percent on November 21, before partially recovering from the day’s lows. The Adani Group’s market capitalisation plummeted by Rs 2.2 lakh crore in a single day, with group firms such as Adani Ports, Adani Total Gas, and Ambuja Cements also suffering steep losses.
Separately, stock of construction company PSP Projects, which recently announced that Adani Infrastructure would acquire a 30.07 percent stake in the company, fell over 9 percent to an intraday low of Rs 609, before recovering slightly.
Banking stocks were also hit, especially major lenders to the Adani Group firms. PSU banks such as State Bank of India (SBI), Bank of Baroda (BoB), and Punjab National Bank (PNB) saw their stocks fall by as much as 7 percent. Nifty Bank and Nifty PSU Bank indices fell between 1 and 3 percent, with private sector banks faring relatively better but still in the red.
The impact extended beyond Indian securities. Adani’s dollar-denominated bonds tumbled. Notes issued by Adani Green Energy in March fell a record 15 cents, while Adani Electricity Mumbai bonds maturing in 2030 dropped 8.6 cents, reported Bloomberg. Moody’s has termed the bribery charges “credit negative,” citing concerns over governance and the group’s ability to access capital to meet liquidity requirements.
Adani Green Energy announced the cancellation of its proposed $600-million bond issuance, citing the ongoing legal troubles. The cancellation comes in the middle of Adani Group’s broader debt management strategy, which has included prepaying Rs 7,374 crore in share-backed loans and raising funds through a $1 billion QIP and a $500 million share sale in recent months. The group had also planned to issue $1.5 billion in dollar bonds for refinancing by early 2025.
Meanwhile, US-based investment firm GQG Partners, a key investor in Adani stocks, saw its own stock fall 20 percent to AUD 1.98 on November 21. GQG has assured investors that 90 percent of its clients' assets remain invested in non-Adani issuers and is reviewing its portfolio exposure to the group.
Markets reacted negatively. Bernstein India shrugged off the impact of Adani news on overall markets as a short-term issue. The firm’s India head of research Venugopal Garre said that infrastructure-related incidents are typically transitory, and that the markets would forget this development soon and move on. Nonetheless, benchmark indices Sensex and Nifty fell up to 0.8 percent intraday, with Adani-linked stocks leading the losses.
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