Adani Group stocks saw a highly volatile session on November 22, recovering after an early drop of nearly 10%. Adani Green Energy surged over 6%, Adani Enterprises climbed almost 4%, Adani Power gained more than 3%, and Adani Ports added over 2%.
This partial recovery followed a sharp 23% plunge on November 23, driven by serious allegations against the group. U.S. prosecutors have charged Adani Group Chairman Gautam Adani, his nephew Sagar Adani, and others in a $265 million bribery and fraud scheme to expand their solar energy business.
Ongoing Challenges
The allegations claim the Adani Group collaborated with executives from a former U.S.-listed company to bribe Indian officials to secure contracts. Adani Group has categorically denied the accusations, labeling them as “baseless.” Meanwhile, Indian authorities have not yet commented.
Adding to the group’s troubles, Kenyan President William Ruto announced the cancellation of two key projects involving Adani companies: an airport expansion project in Nairobi and a $700 million power transmission line initiative.
Market Sentiment and Expert Views
While some Adani Group stocks demonstrated resilience, the long-term impact of these controversies could weigh heavily on investor sentiment and operational stability. Experts remain cautious, urging investors to assess the situation carefully.
Key Opinions:
- Ajit Mishra, SVP, Religare Broking: Mishra noted that most Adani Group stocks are nearing their 52-week lows, with Adani Energy Solutions and Adani Wilmar appearing particularly vulnerable to further declines. He advised investors to avoid taking positions until stability in these stocks becomes evident.
- Jathin Kaithavalappil, AVP, Choice Broking: Kaithavalappil emphasized that bribery allegations have significantly impacted investor confidence, potentially limiting the group’s access to financing. He warned that governance concerns and heightened scrutiny could continue to exert pressure on Adani stocks.
Investor Takeaway
The recent allegations and regulatory challenges present significant risks. Investors are advised to monitor the ongoing legal developments and evaluate the group’s financial and operational health before making any investment decisions. Caution remains the key in the current scenario.
