US indictments scythe $34 bln from value of India's Adani Group firms (updated)

Adani Total Gas

21/11/2024 09:28

(Adds analyst comments, share moves, details)
    By Sethuraman N R, Bharath Rajeswaran and Indranil Sarkar
       Nov 21 (Reuters) - Firms of India's Adani Group
conglomerate lost as much as $34 billion in market value on
Thursday after U.S. prosecutors charged its billionaire chairman
in an alleged bribery and fraud scheme. 
    Gautam Adani's flagship Adani Enterprises  ADEL.NS  tumbled
as much as 23% to its lowest since Nov. 2023 for its worst
one-day drop since February last year. 
    Other group firms - Adani Ports  APSE.NS , Adani Total Gas
 ADAG.NS , Adani Green  ADNA.NS , Adani Power  ADAN.NS , Adani
Wilmar  ADAW.NS  and Adani Energy Solutions  ADAI.NS , ACC
 ACC.NS , Ambuja Cements  ABUJ.NS  and NDTV  NDTV.NS  - also
fell between 6% and 19%.
    The sharp selloff took down the total market capitalisation
of the 10 Adani-backed companies to about $147 billion by 0854
GMT, from $169.08 billion on Tuesday.
    "Normally investors do not like any lapse of corporate
governance and till the time there is clarification, investors
will shy away from Adani group stocks," said Saurabh Jain, a
retail equities analyst at SMC Global Securities.
    In a statement, Adani Group dismissed the accusations as
"baseless and denied", and vowed to seek "all possible legal
recourse".
    They come within two years of U.S. short-seller Hindenburg
Research's accusations of improper use of tax havens and
involvement in stock manipulation by Adani group, which the
conglomerate has also denied. 
    This week U.S. authorities said Adani and seven other
defendants, including his nephew Sagar Adani, agreed to pay
about $265 million in bribes to Indian government officials for
contracts expected to yield profit of $2 billion over 20 years,
and develop India's largest solar power project.
    The prosecutors added that the Adanis, along with former
chief executive Vneet Jaain of Adani Green Energy  ADNA.NS ,
raised more than $3 billion in loans and bonds by hiding their
corruption from lenders and investors.
    Adani Green Energy, however, cancelled plans to raise $600
million in U.S. dollar-denominated bonds. The issue had been
priced but was pulled after the news.
    "The group faces growing challenges in accessing global
capital markets amid heightened scrutiny," said Narinder Wadhwa,
managing director of SKI Capital.
    "Such withdrawals indicate a defensive posture as the group
focuses on mitigating damage."
    In early Asian trade, Adani dollar bonds slumped, with
prices down 3 cents to 5 cents on bonds for Adani Ports and
Special Economic Zone  US00652MAJ18=TE . They were the largest
falls since the short-seller attack of February 2023.
    Group firms also dragged down Indian benchmarks on the day,
with the NSE Nifty 50  .NSEI  falling 0.75% and the BSE Sensex
 .BSESN  losing 0.6%.  .BO   
($1=84.4000 rupees)

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Adani shares slump on US bribery charges    https://reut.rs/3V04TLG
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 (Reporting by Sethuraman NR, Bharath Rajeswaran and Indranil
Sarkar in Bengaluru; Editing by Stephen Coates and Saad Sayeed)
 ((Sethuraman.NR@thomsonreuters.com; (+91 9945291420); Reuters
Messaging: nallur.sethuraman.thomsonreuters.com@reuters.net))