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Adani Group Faces Stock Market Setback Amid Bribery Investigation


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The Adani Group, a conglomerate consisting of 10 companies, has suffered a significant blow as all of its affiliated companies experienced a decline in stock market value. This decline was triggered by a report from Bloomberg stating that the US government has expanded its investigation into potential bribery allegations against the conglomerate.

Adani Enterprises Ltd, the flagship company of the Adani Group, saw a nearly 4% drop in early trading, while Adani Ports and Special Economic Zone Ltd. witnessed a decrease of almost 3%.

According to Bloomberg, Gautam Adani, the founder and Chairman of the Adani Group, is currently under investigation by the US government. The investigation aims to determine whether any company entities or affiliates were involved in bribing Indian officials in order to gain an advantage in energy projects. The US Attorney’s office for the Eastern District of New York and the Department of Justice’s fraud unit are leading the investigation. The Adani Group has denied having any knowledge of such an investigation.

This probe follows allegations made last year by US-based short seller Hindenburg Research, accusing Adani of fraud and market manipulation. Despite these ongoing investigations, Adani Group shares have seen substantial growth over the past year. However, the recent sell-off in the Indian markets has resulted in a significant loss in market capitalisation for Adani stocks, with a total value of over Rs. 90,000 crore being wiped off.

Despite these setbacks, brokerage firms HSBC and Motilal Oswal have maintained their ‘buy’ recommendations for Adani Ports. This decision was influenced by February data that suggested the company could exceed its higher cargo volume guidance for the fiscal year. Additionally, Jefferies initiated coverage on Adani Enterprises with a ‘buy’ rating, predicting a doubling of EBITDA by FY26 to Rs. 21,449 crore and setting a target price of Rs. 3,800 on the stock.

Last year, Hindenburg Research released a report alleging improper governance practices, stock manipulation, and the use of tax havens by the Adani Group. This led to a significant sell-off of Adani Group stocks and bonds. However, the conglomerate strongly denied these allegations. Despite the controversy, Adani Group stocks have shown resilience and significant gains over the past year, indicating investor confidence despite the ongoing investigations.

As of the time of writing, Adani Wilmar was trading at Rs. 338, a decrease of 1.79%, while Adani Power stocks were down over 1% at Rs. 524.95. Adani Enterprises was priced at Rs. 3,095, 1.19% lower than the previous trading session but higher than the 4% drop it experienced earlier in the day. Adani Green stocks were priced at Rs. 1,866, down by nearly 2%, and Adani Energy Solutions was trading at Rs. 1,012.35, reflecting a 3.20% fall.

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