The group’s flagship company, Adani Group, experienced a roughly 4% loss during early trade on Monday, reaching an intraday low of Rs 2,976.05. Adani Ports and Special Economic Zone had a decline of almost 3% as well, coming down to Rs 1,227.25. The stock prices of several Adani Group firms dropped between two and four percent after a Bloomberg story suggested that a US government probe would go further.
The US government is looking into the activities of Adani’s founder and chairman, Gautam Adani, as well as any possible involvement of Adani firms or affiliates in paying Indian officials to obtain favorable treatment in energy projects, according to a story published on Friday by Bloomberg. Azure Power, an Indian renewable energy company, is the subject of an investigation being conducted by the Department of Justice’s fraud branch and the US Attorney’s office for the Eastern District of New York.
Adani responded to the report by saying it was not aware that the company or its founder was the subject of any investigations. This news comes more than a year after Adani was accused of fraud and market manipulation in a study published by short-seller Hindenburg Research. The Bloomberg story sparked further worries in spite of the conglomerate’s denial of these accusations and the recent approval by India’s securities regulator.
Adani shares had huge losses of over $100 billion after the Hindenburg report was released, but the stock has subsequently recovered and even surpassed pre-report levels. Data released on Monday, however, showed that Adani’s dollar-denominated bonds suffered significant losses after the Bloomberg story, bringing up concerns akin to those mentioned in the Hindenburg note.
Following allegations that US authorities had expanded their probe into the group to look into possible bribery, the majority of dollar bonds issued by Adani Group entities dropped to their lowest point in two months on Monday. In early trading in India, shares of all ten groups and affiliated firms experienced a loss of more than 5%, with Adani Total Gas leading the way.
When bond prices declined, the yield on a note issued by Adani Ports & Special Economic Zone and due in February 2032 increased by 38 basis points to 7.20%. Earlier in the day, the yield had increased by 54 basis points to 7.36%, the highest advance in a single session since February. The majority of actively traded dollar bonds experienced their biggest daily loss in the last six to twelve months.
According to Bloomberg on Friday, US authorities are looking into whether an Adani entity or people connected to the business, such as Gautam Adani, were involved in bribing Indian officials for preferential treatment on an energy project. The group did not reply to Reuters’s request for comment right away. In January of last year, a report released by American short-seller Hindenburg Research caused a sell-off in the stocks and foreign-listed bonds of Adani Group firms. All wrongdoing has been refuted by the group. Since then, the majority of the company’s domestic and foreign bond prices have increased above the levels at which they were trading before to the release of the Hindenburg report.
