Adani Energy Solutions hits 20% lower circuit amid bribery charges

Adani Energy Solutions locked in at its 20% lower circuit limit on Thursday, plummeting to Rs 97.70 after allegations of bribery and fraud rattled the Adani Group. The company’s shares fell alongside other group stocks after US prosecutors accused Gautam Adani and key executives of paying $265 million in bribes to Indian officials to secure solar contracts.

The indictment also highlighted the use of fraudulent practices to raise over $3 billion in loans for Adani Green Energy. The charges have put significant pressure on Adani Energy Solutions, which has been integral to the group’s clean energy and infrastructure initiatives.

The market reaction extended to global bonds, with Adani Energy’s dollar debt maturing in 2030 falling eight cents. This marks the sharpest decline since the Hindenburg Research report in February 2023, which initially raised concerns about the group’s financial practices.

Moody’s has labelled the development as “credit negative,” raising alarms about governance and the group’s ability to access capital. Experts suggest that while Adani Energy Solutions has long-term potential in India’s growing energy sector, the allegations may significantly impact investor sentiment and hinder immediate capital-raising efforts.

Investors remain cautious as the company’s governance practices are under intense scrutiny. Analysts believe the current sell-off could deepen unless the group demonstrates transparency and legal compliance.

Adani Energy Solutions is now at a crossroads, with its ambitious energy expansion plans facing potential setbacks due to these mounting legal and financial challenges.