Adani Stocks Crash: Adani group stocks hit a massive low on 21st November 2024 after the Founder Gautam Adani was filed bribery charges by US federal prosecutors. The major stocks of Adani group like Adani Enterprises, Adani Green Energy, and Adani Energy Solutions lost up to 20% shares in the opening trade. 

The Adani Group is one of India’s largest multinational conglomerates, with interests spanning energy, resources, logistics, agribusiness, real estate, and financial services. Founded by Gautam Adani in 1988, it has become a large industry in the Indian economy. However, recent developments have raised serious questions about its governance and operational integrity.

Let’s take a look at the Adani stocks crash in detail. 

Reason Behind Adani Stocks Crash

Gautam Adani has been charged in connection with a $250 bribery case involving allegations related to securing Indian solar contracts through unethical means. This charge has sent shockwaves through the financial markets and has been a major catalyst for the Adani stocks crash.

The implications of these charges are profound. Investor confidence has been significantly undermined, leading to a sharp decline in stock prices. The Adani stock drop reflects the uncertainty surrounding the group’s future operations.

On the day the news broke, Adani stocks crashed by approximately 20%. For investors, this wasn’t just a minor setback; it signified a major financial upheaval. The sharp decline in stock value has raised alarms about the group’s financial stability.

The phrase “Adani stocks crash today” quickly became a trending search term, reflecting the urgency and concern among investors. Many are questioning the sustainability of Adani’s business model in light of the recent allegations.

The accusations also involve efforts to hinder justice by erasing electronic records and providing false information to the Justice Department, SEC, and FBI. Alongside the criminal charges, the SEC has launched a separate civil case.

Impact on Adani Group Stocks

The indictment caused significant declines across the conglomerate’s key businesses:

• Adani Enterprises: The flagship company saw its stock price tumble by 22.3%.
• Adani Ports & Special Economic Zone: Shares dropped 20%.
• Other Group Companies: Stocks declined between 8.5% and 20%, amplifying the overall loss in market capitalization.

The downturn reflects a crisis of confidence among investors who are now questioning the governance practices of one of India’s largest conglomerates.

Adani Group’s Bonds Take a Sharp Hit

The allegations have also impacted the Adani Group’s international bonds, with dollar-denominated securities witnessing significant declines. Adani Green Energy’s bonds issued in March dropped by 15 cents a record low while Adani Electricity Mumbai’s bonds maturing in February 2030 fell by 8.6 cents, according to Bloomberg. 

This represents the steepest decline in the group’s debt securities since the 2023 Hindenburg Research report, which wiped out over ₹12 lakh crore in the combined market value of Adani Group stocks and bonds.

Adani Group’s Efforts to Reduce Debt Amid New Controversy

The latest controversy emerges as the group continues its efforts to lower debt and strengthen its financial footing. In March 2023, it prepaid ₹7,374 crore in share-backed loans and aimed to clear all such obligations by the month’s end to ease concerns about its leverage.

Recent fundraising initiatives include a $1 billion QIP by Adani Energy Solutions in August 2024 to cut debt and invest in power infrastructure, and a $500 million share sale by Adani Enterprises in October 2024 to fund energy projects, build a PVC plant, and reduce airport unit debt. 

Additionally, the group plans to raise at least $1.5 billion through dollar bonds under Adani Green Energy and Adani Energy Solutions by early 2025, primarily for refinancing.

Key Points on Adani Stocks Crash

1. Stock Performance:

• Adani Enterprises fell 24% intraday, closing 23% lower at ₹2,184.
• Adani Green Energy dropped 20% to ₹1,146.
• Adani Energy Solutions ended at ₹697.25, down 20%.

2. Bribery Allegations:

• US prosecutors filed charges against Gautam Adani, Sagar R Adani, and Vneet S Jaain for a $250 million bribery scheme involving solar energy contracts.
• Allegations include false statements to US investors and evidence deletion to obstruct justice.

3. Impact on Bonds:

• Adani Green Energy’s March-issued bonds dropped 15 cents.
• Adani Electricity Mumbai’s February 2030 bonds fell 8.6 cents, marking the steepest decline since the 2023 Hindenburg report.

4. Debt Reduction Efforts:

• Prepaid ₹7,374 crore in share-backed loans in March 2023.
• Raised $1 billion via QIP in August 2024 and $500 million in October 2024 to reduce debt and invest in new projects.
• Plans to issue $1.5 billion in dollar bonds by early 2025 for debt refinancing.

5. Investor Challenges:

• The group’s ongoing efforts to stabilize its financial position are overshadowed by allegations, further straining investor sentiment.

Conclusion

The Adani Group is grappling with significant challenges as fresh allegations of bribery and obstruction have triggered sharp declines in its stock and bond values. The accusations, coupled with renewed legal and financial scrutiny, have shaken investor confidence. 

Despite recent efforts to reduce debt and stabilize operations, the group faces a tough road ahead in rebuilding trust and addressing the fallout from these allegations.