Adani Enterprises Leads Group After US Brings Bribery Probe into Focus

In the wake of recent reports, Adani Group's stock prices witnessed a tangible drop, with figures tumbling down between 2-4% on Monday. This downtrend followed news from Bloomberg suggesting that the United States may be intensifying its investigation into the Indian conglomerate's operations, possibly widening the scope of a bribery inquiry.

Details of Stock Decline

The flagship company of the group, Adani Enterprises, saw its stock plummet nearly 4%, touching an intra-day low of Rs 2,976.05 in early market hours. Another key subsidiary, Adani Ports and Special Economic Zone, also underwent a significant decline of over 3%, falling to Rs 1,227.25. These decreases aligned with the overall bearish sentiment that enveloped the group's shares, as entities like Adani Power, Adani Green Energy, and Adani Total Gas Limited also faced losses between 2% and 3%.

Backdrop of the Probe

According to the Bloomberg report which surfaced on Friday, the US investigation might be inspecting potential misconduct by Gautam Adani, the founder and chairman of Adani Group, and looking into the possibility of the group's involvement in bribing Indian officials. This was done to ostensibly secure preferential outcomes in various energy projects. The U.S. Attorney's office for the Eastern District of New York alongside the Department of Justice's fraud unit are reportedly leading the probe, which also touches upon the operations of Azure Power, another Indian renewable energy firm.

Though Adani Group responded to the burgeoning story claiming unawareness of any ongoing investigation against the company or its chairman, market reactions were swift and pronounced. The conglomerate has previously been the target of fraud and market manipulation allegations by Hindenburg Research, an attack it survived by securing a clean chit from India's securities regulator post the accusations.

Despite these reassurances and a notable recovery in Adani stock prices after the Hindenburg allegations, the latest Bloomberg report has resurfaced similar concerns, contributing to the dip in investor confidence and a visible impact on Adani’s dollar-denominated bonds, which saw sizeable losses on Monday.

Adani, Stocks, Probe