Here's how Adani stocks performed after US allegations and Hindenburg reports

The Adani Group faced a major setback on Thursday as allegations of bribery and fraud surfaced against its founder, Gautam Adani, and senior executives. The accusations led to a steep drop in stock prices, significantly affecting the group’s market value. Here’s a breakdown of the events and their impact on Adani stocks.

Adani Stocks Fall Sharply Amid Bribery Claims

Shares of the Adani Group fell by up to 20% after the US Securities and Exchange Commission (SEC) accused Gautam Adani and seven others of being involved in a large-scale bribery and fraud scheme on Thursday, November 21, according to ET. Reports claim Adani and his nephew, Sagar Adani, paid $265 million in bribes to Indian officials to secure solar energy contracts expected to earn $2 billion in profits over 20 years.

Following these charges, a US court issued arrest warrants for Gautam Adani and Sagar Adani. Prosecutors have also indicated that these warrants will be handed to international law enforcement agencies for action.

Adani Enterprises Struggles to Hold Key Support Levels

Adani Enterprises, the group’s flagship company, faced heavy losses, testing key technical support at its 200-week moving average. This level, which helped stabilise the stock during the January 2023 Hindenburg crisis, appears fragile as investor confidence continues to waver.

Massive Losses for Adani Group Stocks

The bribery allegations caused panic among investors, leading to a Rs 2.6 lakh crore drop in the Adani Group’s total market value during early trading. The group’s combined market valuation slipped to Rs 11.91 lakh crore from Rs 14.24 lakh crore just two days earlier.

Several stocks hit their daily lower circuit limits, with Adani Energy Solutions falling 20% to Rs 174. Adani Power, Adani Green Energy, and Adani Total Gas declined by up to 17%, while Adani Enterprises lost 10% in early trade.

Hindenburg Reports 2023

When US short-seller Hindenburg Research first targeted the Adani Group on 24 January 2023, it accused the conglomerate of carrying out the "biggest fraud in corporate history" through "accounting irregularities and stock price manipulation." This triggered a massive sell-off in the stock market, causing Adani Group companies to lose thousands of crores in market value.

Within just five weeks, the group’s market value plunged by approximately 65%, falling to Rs 6.7 lakh crore, as reported in TOI. During this period, Gautam Adani, the group’s chairman and the world’s second-richest person in late January 2023, dropped below the 25th position on the global rich list. Additionally, Adani Enterprises, the flagship company, had to cancel its $2.5 billion follow-on public offering (FPO).

Hindenburg striked again

Nearly 18 months after its first report accusing the Adani Group of financial mismanagement, Hindenburg Research has made fresh claims. On August 10 this year, the US-based short-seller alleged that SEBI Chairperson Madhabi Puri Buch and her husband were linked to offshore entities tied to Adani-related funds.

The whistleblower documents suggest complex financial structures in Bermuda and Mauritius were used to funnel money. The claims have reignited concerns about the Adani Group’s financial dealings and governance.

Adani’s Market Value Declined in the past

The new Hindenburg allegations follow the devastating impact of its initial report in January 2023, which caused Adani Group stocks to lose Rs 11 lakh crore ($132 billion) in market value within a month, reported in India Today. By February 2023, the group’s valuation had fallen to Rs 8.2 lakh crore, less than half of its January high of Rs 19.2 lakh crore.

The Hindenburg 2.0 report has added to the group’s troubles for investors, with Rs 53,000 crore wiped out in market value on Monday, August 12 two days after the report came out, reported in TOI. Shares of 10 Adani companies saw declines of up to 7% during the morning session before recovering slightly.

What Lies Ahead for Adani Stocks?

The Adani Group now faces a tough road ahead as it deals with legal battles, allegations of bribery, and claims of offshore financial irregularities. Investor confidence has been severely shaken, and the group’s ability to recover its reputation and market stability remains uncertain.

Current status of Adani stocks

Shares of Adani Group companies jumped by as much as 7.5% on the BSE today after Adani Green Energy (AGEL) stated on Wednesday. The company clarified that Gautam Adani, Sagar Adani, and senior executive Vneet Jaain have been cleared of all bribery charges by the US Department of Justice. However, it noted that three charges from the indictment remain.

Adani Enterprises saw a gain of 4.15%, reaching Rs 2,239.10, while Adani Ports climbed 1.6% to Rs 1,147.30. Adani Green Energy shares increased by 4%, and Adani Energy Solutions surged by 7.45% to hit Rs 646.85, its highest for the day, reported in TOI.

Adani Power also made a significant jump, rising 6% to an intraday high of Rs 463.95. Meanwhile, Adani Total Gas and Adani Wilmar recorded gains of 2-4%.

Key Points to Remember

- Gautam Adani and others are accused of paying bribes to secure energy contracts.

-Adani stocks suffered sharp declines, losing Rs 2.6 lakh crore in value.

-Fresh allegations by Hindenburg Research have further dented confidence.

-The group’s market value has fallen drastically since January 2023.

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