Markets: After untenable US claims, Adani shares bounce back; Sensex, and Nifty climb
Virendra Pandit
New Delhi: Despite the outgoing US President Joe Biden’s Democratic Party fervently attempting to discredit the Narendra Modi-led NDA government, the impact of the so-called “indictment” of billionaire Gautam Adani and his associates in an alleged bribery case was short-lived on Indian markets which bounced back, the media reported on Wednesday.
But the Adani Group’s 11 listed firms have lost over US 55 billion in market capitalization since Friday last week when the US Department of Justice sought to frame Adani and others in a case full of loopholes and disbelief, which would hardly stand in a court of law.
On Wednesday, equity benchmark indices Sensex and Nifty rebounded, driven by a sharp rally in Adani group stocks and fresh foreign fund inflows. The BSE benchmark Sensex climbed 230.02 points or 0.29 percent to settle at 80,234.08. During the day, it surged 507.09 points or 0.63 percent to 80,511.15. The NSE Nifty rose 80.40 points or 0.33 percent to 24,274.90.
From the 30-share Sensex pack, Adani Ports surged 6 percent. Shares of Adani Group firms, including Adani Power, Adani Total Gas, Adani Enterprises, Adani Energy Solutions, and Adani Green Energy, surged after an entity said that Gautam Adani and his aides have not been charged under the US Foreign Corrupt Practices Act, adding that they faced three other charges, including securities and wire fraud that are punishable with monetary fines. Some of the group firms hit their upper circuit limits.
In early trade, Adani Group stocks such as Adani Green Energy Ltd, Adani Power Ltd, Adani Energy Solutions Ltd, and Adani Enterprises Ltd gained as much as 10 percent after a fresh clarification on the US bribery charges.
The gains reached up to 17 percent after the group clarified that Gautam Adani, Sagar Adani, and senior executive Vneet Jaain are not facing charges under the US Foreign Corrupt Practices Act (FCPA).
Other Adani group stocks also showed positive momentum. Adani Total Gas Ltd (AGEL) rose 17.68 percent to Rs 681.95, Adani Wilmar Ltd increased 9.28 percent to Rs 317.40, and Adani Ports and Special Economic Zone posted a gain of 8.27 percent, rising to Rs 1,222.25 per share.
The rally followed a clarification by AGEL that dismissed allegations of bribery or corruption charges against key executives, addressing concerns raised by recent media reports.
In a statement to the stock exchanges, AGEL said, “Mr. Gautam Adani, Mr. Sagar Adani, and Mr. Vneet Jaain have not been charged with any violation of the FCPA in the counts set forth in the indictment of the US Department of Justice (DOJ) or the civil complaint of the US Securities and Exchange Commission (SEC). The charges against them include alleged securities fraud conspiracy, wire fraud conspiracy, and securities fraud.”
The company added that media reports suggesting bribery allegations were incorrect.
Adani stocks recovered ground after a sharp fall in the previous couple of sessions, which followed a downgrade by global rating agency Moody’s, which revised its outlook for seven Adani Group entities, citing risks related to funding access and increased borrowing costs.
S&P Global Ratings also pointed out that the allegations in the US could impact the group’s funding capabilities. However, the fresh clarification may have eased investor concerns for now.
In its first detailed response to the US authorities’ alleged indictment, the Adani group clarified that there are no bribery charges against Gautam Adani and his close associates, “in the counts set forth in the indictment of the US DOJ or the civil complaint of the US SEC.”
In the criminal indictment, the directors have been charged with three counts of alleged securities fraud conspiracy, alleged wire fraud conspiracy, and alleged securities fraud.
It added that only officials of Azure Energy and Canadian institutional investor Caisse de Depot et placement du Quebec (CDPQ), had been charged with bribery in the US indictment.
