Adani Group Stocks Show Mixed Performance as US SEC Seeks India's Assistance in Fraud Investigation

Shares of Adani Group companies displayed a mixed trend on Wednesday following a Reuters report that the U.S. Securities and Exchange Commission (SEC) has sought assistance from Indian authorities regarding its investigation into alleged securities fraud and bribery involving Gautam Adani and his nephew, Sagar Adani.

Stock Performance

During early trading:

• Adani Green Energy share price recorded the steepest decline, falling 1.9% to ₹881.
• Adani Enterprises, the group’s flagship firm's share price dropped 0.4% to ₹2,211, while Adani Ports' share price slipped 0.2% to ₹1,083.
• In contrast, Adani Energy Solutions' share price gained 0.5% to ₹680, Adani Total Gas' share price increased 0.4% to ₹582, and Adani Power's share price inched up 0.3% to ₹486.
   

The broader market remained largely stable, with the NSE Nifty 50 index climbing 0.2% to 22,990 points, rebounding from earlier mild losses.

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Legal Developments & U.S. Investigation

According to a Reuters report, which cites a New York district court filing, the SEC has approached India’s Ministry of Law and Justice to assist in delivering its complaint to Gautam and Sagar Adani. The U.S. regulator informed the court that its efforts to serve the complaint were still underway, as both individuals are currently in India and not under U.S. jurisdiction.

The legal scrutiny intensified after U.S. federal prosecutors in Brooklyn unsealed an indictment in November 2024, alleging that Adani bribed Indian officials to obtain electricity contracts through Adani Green Energy while misleading U.S. investors about the company’s anti-corruption measures. Additionally, the SEC filed a civil lawsuit, separate from the criminal charges brought by the U.S. Department of Justice (DOJ).

In response, the Adani Group strongly refuted the allegations, labeling them as "baseless" and asserting that it would pursue "all possible legal recourse."

Market Reaction & Recovery Efforts

The bribery allegations led to a significant sell-off in Adani Group stocks in November 2024, with sharp declines in both equity prices and dollar-denominated bonds. Some securities experienced their worst drop since the 2023 Hindenburg Research report, which had previously triggered a major rout in Adani stocks.

Despite the turbulence, Adani stocks later rebounded, driven by the group’s debt reduction measures and fundraising initiatives. Key efforts included:

• $1 billion raised via a Qualified Institutional Placement (QIP) by Adani Energy Solutions in August 2024.
• $500 million secured through a share sale by Adani Enterprises in October 2024.
• A plan to issue at least $1.5 billion in dollar bonds under Adani Green Energy and Adani Energy Solutions by early 2025, primarily for debt refinancing.
   

Analysts suggest that Adani Group's financial resilience, strong cash flow, and strategic expansion efforts have helped restore investor confidence despite ongoing regulatory scrutiny. However, concerns over potential legal consequences and further probes by U.S. authorities could continue to weigh on Adani stocks in the near term.

Meanwhile, institutional investors and global rating agencies are closely monitoring developments, particularly regarding how the Indian government responds to the SEC’s request for cooperation. A lack of intervention from Indian regulators could indicate that Adani Group may not face domestic legal consequences, which could support further stock recovery. However, if Indian authorities choose to comply with U.S. legal requests, the situation could escalate, posing additional risks to Adani Group’s business operations and stock performance.

For now, Adani Group remains focused on maintaining business stability, reassuring investors, and executing its long-term growth strategy, which includes renewable energy expansion, infrastructure projects, and international partnerships.