Shares of the 11 companies that operate under giant Indian industrial conglomerate Adani Group, soared on Wednesday, a week after Gautam Adani, founder and chairman of Adani, and other executives were indicted in New York for their alleged roles in a multi-million-dollar bribery and fraud scheme.
Leading the rally was Adani Total Gas, which surged 15.7%, Adani Energy Solutions and Adani Green Energy zoomed 10%, Adani Power jumped 7.0%, and Adani Enterprises climbed 1.7%per cent on the BSE. The shares were traded on heavy volume, with Adani Energy Solutions and Adani Green Energy hitting their highest trading permissible limit for the day.
The Adani Group is not a stranger to controversy. Last year, the shares were hammered after short-seller Hindenburg Research published a damning report alleging that Adani Group was involved in “brazen stock manipulation” and “an accounting fraud scheme over the course of decades”.
According to Hindenburg, Adani had managed to amass a net worth of roughly $120 billion, with $100 billion coming in the past 3 years, largely through stock price appreciation in the group’s seven key listed companies, which had spiked an average of 819% over the timeframe. Hindenburg argued that Adani Group’s seven key listed companies “…had 85% downside purely on a fundamental basis owing to sky-high valuations”.
To allay investor concerns, Adani Group sold Rs 15,446 crore (~$1.9B) worth of shares in four of its companies to US-based equity fund GQG Partners and also held multiple roadshows in London, Dubai, Hong Kong and Singapore, among other locations. The measures appear to have worked and the shares fully recovered.
Adani’s indictment in the United States leaves his plans for the country hanging in the balance.
Last week, Gautam Adani, said in a social media post on platform X on Wednesday that the company will invest $10 billion in energy and infrastructure projects in the United States. Adani has revealed that his company also aims to create up to 15,000 jobs in the country, but did not give the time period or details of the projects.
On Monday, French supermajor TotalEnergies, which is a partner of India’s Adani group in renewable energy projects, said it would not make any new financial contribution as part of its investments in the group of companies until the ongoing U.S. investigations into Adani executives for corruption are clarified. Likewise, Kenya has cancelled energy and airport deals with Adani in response.
Source: By Alex Kimani from Oilprice.com