MUMBAI : Adani Group’s dollar bonds and stocks plummeted on Monday, on news that US prosecutors have widened their probe of the conglomerate to focus on whether it engaged in bribery.
An email sent to an Adani group spokesperson remained unanswered.
Several Adani Group firms’ dollar bonds experienced their worst fall in over six months. Adani Ports & Special Economic Zone Ltd.’s 2041 bond saw the biggest drop, plunging 3.2 cents to 78.85 cents, its steepest decline since August 2023. A bond from Adani Renewable Energy fell 3.15 cents to 82.63 cents, its sharpest decline since February.
The sell-off extended to the company’s stocks as well. Shares of Adani Enterprises fell nearly 5% intraday, eventually closing 0.65% lower at ₹3,111.75 per share on the National Stock Exchange. Other group companies such as Adani Ports, Adani Total Gas, Adani Energy, and Adani Power also saw their stocks drop between 2% and 4.5%.
This market rout resulted in a substantial loss for the Adani Group. Their market capitalization plummeted by ₹48,298 crore during the day, bringing it down to ₹15.29 trillion. By the close of the market, the group’s market cap stood at ₹15.52 trillion.
“The negative news surrounding the US investigation has disproportionately impacted Adani Group shares due to their high-beta nature. High-beta stocks tend to experience larger swings than the overall market. In this case, the ongoing market consolidation, in which broader indices are experiencing sideways movement, has amplified the negative reaction to the Adani news,” Kranthi Bathini, director of equity strategy at Wealth Mills Securities Pvt Ltd, said.
Bloomberg reported on Friday that the US government was scrutinising the conduct of the group’s founder and chairman Gautam Adani. The investigation reportedly centres on whether Adani entities or affiliates bribed Indian officials to get preferential treatment for an energy project.
Last year, Adani Group stocks crashed after short-seller Hindenburg Research accused the conglomerate of manipulating its stock price and accounting fraud. The group vigorously denied the allegations and its shares have since recovered.
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Published: 18 Mar 2024, 11:31 AM IST