The Indian stock market was shaken by a dramatic fall in the Adani Group stocks following serious bribery allegations against the group's chairman, Gautam Adani, and several executives. The chaos sent BSE Sensex crashing down by 422 points, closing the trading day at 77,155.79 points, while the NSE Nifty suffered an equally significant drop of 168 points.
The news of the scandal spread like wildfire, leading to a massive selloff. Affected stocks included Adani Enterprises, which nosedived 23%, Adani Energy Solutions, dropping 20%, and Adani Green Energy, which plunged 18.8%. This drastic decrease in stock values has wiped out approximately Rs 2.22 lakh crore in market capitalization for the Adani conglomerate.
The allegations center on claims from US prosecutors that Adani and his associates paid a whopping Rs 2,029 crore in bribes to Indian officials to secure lucrative solar energy contracts. This has also led to accusations of false statements being made to US investors during fundraising efforts between 2021 and 2024. The aftermath of these revelations led to the cancellation of Adani Group's proposed $600-million bond offering.
Financial institutions with links to Adani, such as public sector lenders like SBI and PNB, felt the shockwaves of this scandal, with losses reaching up to 4.5%. This not only compounds investor concerns at a crucial time but also marks the second major crisis the Adani empire has faced. The first was the Hindenburg Research report earlier in 2023, which erased $150 billion in market value for the conglomerate.
Questions now loom over the future of the Adani Group as the market response showcases the investor's fears regarding corporate governance within the conglomerate. Adani Group’s quick rise in industries like infrastructure, power, and transport has made it one of India’s leading firms, but it also placed them under intense scrutiny from global investors and regulators. This ongoing crisis could signal a turning point for the company’s operations and reputation.
