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MUMBAI: The Adani group counters plummeted over 22 per cent to hit lower circuits in early trade Thursday. This followed after New York federal prosecutors last night charged founder Gautam Adani along with six other key people of the group in an alleged USD 250-million bribery scheme to win solar power contracts.
Adani stocks crack up to 22% after US court indictment in USD 250-m bribery case
The collateral damage also has the lenders led by State Bank and the group’s key investor GQP Partners also tanking.At 11:15 hrs, the stock mayhem is by the flagship Adani Enterprises, Adani Green Energy Adani Energy Solutions and Adani Ports losing as much as 9-22 per cent in the opening trade.
While Adani Enterprises are locked in a lower circuit down by 21 per cent, Adani Green Energy is down by 19 percent, Adani Energy Solutions tanked 20 per cent to hit the lower circuit at Rs 697.25 and Adani Ports tumbled by 19 per cent. Ambuja is down by 11 percent, ACC cracked by 10 percent.Adani Group chairman Gautam AdaniVindicates demand for JPC probe: Congress on US indicting Adani over alleged bribery, fraud
Moody’s Ratings in a quick commentary said, “The indictment is credit negative for the Adani group companies. Our main focus when assessing the group is on the ability of its companies to access capital to meet their liquidity requirements and on its governance practices.”On Wednesday a New York federal court prosecutors charged Gautam Adani and six other key officials with participating in an alleged USD 250 million bribery scheme to secure solar energy contracts in the country.
The indictment, filed in Brooklyn, New York, accused Adani, along with Sagar Adani and Vineet Jaain and others of orchestrating an elaborate scheme involving false statements to US investors in violations of federal laws.The allegations also include bids to obstruct justice by deleting electronic evidence and misleading the Justice Department, the Securities and Exchange Commission, and the FBI. In addition to the criminal charges, the SEC has filed a separate civil lawsuit.The indictment has hit Adani Group’s international securities as well, with its dollar-denominated bonds falling sharply.
On the other hand stocks of the lenders to the group also suffered sharp declines. Its key lenders include State Bank of India, ICICI Bank, Axis Bank, Yes Bank, IndusInd Bank, IDFC First Bank, Bank of India, RBL Bank, Central Bank of India, Union Bank of India, IDBI Bank and REC. The shares of these lenders are trading 4-8 percent down.After the Hindenburg report in January 2023, several domestic banks and financial institutions had publicly disclosed their exposure to the Adani Group. At the time, LIC revealed an exposure of Rs 35,920 crore, consisting of Rs 30,130 crore in equity and Rs 5,790 crore in debt. SBI has a total exposure of around Rs 27,000 crore to the conglomerate, Axis Bank has Rs 9,220 crore and PNB and REC have Rs 7,000 crore each.Another collateral damage is GQG Partners which fell by 10 percent.
The investor made good out of its billions of investment in Adani group after they were up for song following the Hindenburg allegations in January 2023.The airports and ports to the edible oil group have 10 listed companies including two cement makers which it bought out in 2022.
