Adani Enterprises plunges 23%: Rs 2.25 lakh crore market cap wiped out

Adani Enterprises, the flagship company of the Adani Group, faced a devastating 23% crash on Thursday, closing at Rs 2,256.20. This freefall erased approximately Rs 2.25 lakh crore from the group’s combined market capitalisation, which now stands at Rs 12 lakh crore. The sharp decline comes after US prosecutors indicted Gautam Adani and seven others, including his nephew, Sagar Adani, for alleged bribery and fraud under the Foreign Corrupt Practices Act.

The indictment accuses the group of paying more than $250 million in bribes to secure solar energy contracts, expecting profits of $2 billion over two decades. Prosecutors revealed a scheme involving misleading statements to secure $3 billion in funding, with the use of code names like “Numero Uno” for Gautam Adani.
The impact was felt globally, with bonds tied to Adani Enterprises maturing in 2027 and dropping over five cents on the dollar, signalling growing investor unease. Moody’s highlighted the charges as “credit negative,” raising concerns about governance practices and liquidity management.

"In or about and between 2020 and 2024, Senior executives of an Indian renewable-energy company, which was a portfolio company of an Indian conglomerate, an issuer company that operated in the renewable-energy sector whose securities were traded on the US exchange and that issuer's largest shareholder, a Canadian institutional investor, participated in a scheme to bribe Indian government officials to ensure execution of lucrative solar energy supply contracts with Indian Government entities," the US District Court said in its order.

However, the Adani group has denied the allegations and called them baseless.

GQG Partners, a prominent Adani investor, announced a review of its exposure, further amplifying market volatility. Experts predict continued uncertainty until the group addresses governance concerns and legal challenges.

The stock’s fall marks its worst trading session since the Hindenburg report in early 2023, which had initially raised red flags about the conglomerate’s debt levels and alleged financial mismanagement. Analysts caution that while the group’s fundamentals remain strong in certain sectors, sentiment-driven sell-offs could pose significant near-term challenges.

Investors are advised to tread cautiously as Adani Enterprises faces a critical test of its governance, financial resilience, and credibility on the global stage.