Why all Adani stocks are trading in red today
In a major setback to Adani Group, all 10 companies that are part of conglomerate have experienced a rout on stock market. The fall in stock prices came in the wake of Bloomberg's report that the US government has broadened the scope of investigation into potential bribery allegations against the conglomerate. The group's flagship company, Adani Enterprises Ltd, experienced a nearly 4% drop in early trading. Adani Ports and Special Economic Zone Ltd. also saw a decrease of almost 3%.
US investigation focuses on Adani Group founder
Bloomberg reports that Gautam Adani, founder and Chairman of the Adani Group, is under investigation by the US government. The probe seeks to ascertain if any company entities or affiliates were involved in bribing Indian officials to gain an advantage over energy projects. The investigation is spearheaded by the US Attorney's office for the Eastern District of New York and the Department of Justice's fraud unit. The Adani Group has stated that it has no knowledge of any such investigation.
Past allegations and stock performance
The probe follows accusations made by US-based short seller Hindenburg Research last year alleging fraud and market manipulation by Adani. Despite these ongoing investigations, shares of Adani Group have seen substantial growth over the past year. However, the recent sell-off in the Indian markets has caused a significant loss in market capitalisation for Adani stocks. The total value wiped from the companies' market capitalisation has surpassed Rs. 90,000 crore.
Brokerage firms stand by Adani stocks
Despite recent setbacks, brokerage firms HSBC and Motilal Oswal have reiterated their 'buy' calls for Adani Ports. The decision came after February data bolstered confidence that the company could exceed its higher cargo volume guidance for the fiscal year. Additionally, Jefferies initiated coverage on Adani Enterprises with a 'buy' rating, forecasting a doubling of EBITDA by FY26 to Rs. 21,449 crore and setting a target price of Rs. 3,800 on the stock.
Adani Group's response to Hindenburg row
Last year, following a report by Hindenburg Research alleging improper governance practices, stock manipulation and use of tax havens by the group, there was a significant sell-off of stocks and bonds from Adani Group. However, the Indian conglomerate strongly denied these allegations. Despite the controversy, the company's stocks have demonstrated resilience with substantial gains over the past year—a testament to investor confidence despite ongoing investigations.
Latest stock prices of Adani companies
At the time of writing, Adani Wilmar was trading at Rs. 338, which is a drop of 1.79% while Adani Power stocks were down over 1% at Rs. 524.95. Adani Enterprises was priced at Rs. 3,095, 1.19% lower than last trading session but higher than 4% drop it experienced early morning. Stocks of Adani Green were priced at Rs. 1,866, down by nearly 2% while Adani Energy Solutions was trading at Rs. 1,012.35—a 3.20% fall.
