Adani stocks crash Rs 2.6 lakh crore after US bribery bombshell

By The Capital

On 21 Nov 2024 17:21:30

Adani stocks crash Rs 2.6 lakh crore after US bribery bombshell

In a market bloodbath, Adani Group stocks nosedived on Thursday after US prosecutors filed explosive bribery charges against Gautam Adani and seven senior executives. Investors witnessed a massive erosion of wealth, with the conglomerate’s 10 listed companies losing over Rs 2.6 lakh crore in market value in a single trading session.

The shocking allegations triggered panic among traders, with stocks across the group hitting their lower circuit limits. This marks the worst collapse for Adani shares since the damning Hindenburg Research report in January 2023, which had wiped out Rs 1 lakh crore.

The group’s total market capitalization plunged from Rs 14,24,432.35 crore on Tuesday to Rs 11,91,557.79 crore on Thursday, leaving investors reeling. Adani Enterprises Limited, the flagship entity, led the rout with a 20 percent crash to Rs 2,256.2, wiping off Rs 61,096.85 crore in value.

Adani Ports and Special Economic Zone slumped 20 percent, erasing Rs 55,688 crore. Adani Green Energy shares tumbled 19 percent, losing Rs 42,887.68 crore. Adani Power plunged 18 percent, shedding Rs 36,000 crore in market capitalization.

Adani Energy Solutions (formerly Adani Transmission) hit its 20 percent lower limit, cutting Rs 21,000 crore from its value. Adani Wilmar slid 10 percent, with a loss of Rs 4,289 crore. Among its acquired firms, Ambuja Cements and ACC Limited together suffered a Rs 25,996 crore blow, while NDTV fell 14 percent, losing Rs 157 crore.

Adani Group canceled its $600 million bond offering just hours after pricing it, as the bribery allegations dented investor confidence. Existing US dollar bonds of the conglomerate tanked in Asian trading, with some losing up to 15 percent.

Adani Green Energy acknowledged the legal storm in a statement: “The United States Department of Justice and the United States Securities and Exchange Commission have issued a criminal indictment and civil complaint in the US District Court for the Eastern District of New York against our board members Gautam Adani and Vneet Jain.

In light of these developments, our subsidiaries have decided not to proceed with the proposed USD-denominated bond offerings.” With allegations of corruption and financial misconduct shaking the group's foundation, analysts warn of more turbulence ahead, reminiscent of the Hindenburg-driven meltdown that rocked the group earlier this year.