Adani stocks tumble on US inquiry concerns; group losses Rs 48k cr in m-cap

Adani firms’ combined market capitalisation declined by nearly Rs 48,000 crore to below Rs 10 trillion, following reports that US authorities had opened an inquiry into statements made by the group during its investor meetings.

The US Attorney’s Office in Brooklyn, New York, has sent inquiries in recent months to institutional investors with large holdings in Adani group stocks, according to a Bloomberg report, which quoted a person familiar with the inquiries. The requests for information were focused on what the Adani group told those investors, said the person, who asked not to be identified because the probe isn’t public. The Securities and Exchange Commission also has a similar probe underway, the report said quoting two others. 

Following the report, an Adani group spokesperson, in a statement, said: “We strongly reject any suggestion that the Adani group and its businesses have not acted as per the regulations and accounting standards of the jurisdictions in which they operate.”

“We are not aware of any such subpoena to investors. Our various issuers groups remain confident that the disclosures are full and complete as disclosed in the relevant issuer offering circulars,” the spokesperson further said.

Shares of flagship Adani Enterprises fell 6.8 per cent, extending its month-to-date fall to 10.5 per cent. Eight other group stocks fell between 9.6 per cent and 1 per cent. Only Ambuja Cements ended with gains of 0.6 per cent.

During the week, the Adani group lost $9 billion in market cap — most in nearly four months.

“I think this is a typical knee-jerk market reaction to the news. It’s a routine inquiry process that the regulators undertake,” said Abhay Agarwal, founder and fund manager at Piper Serica Advisors.

Requests for information from US prosecutors don’t necessarily mean that criminal or civil proceedings will be filed as law enforcement agencies often open inquiries that don’t lead to action.

The interest from US authorities adds to the intense scrutiny of the Adani group, one of India’s biggest conglomerates, following American short-seller Hindenburg Research’s report accusing it of long-running stock manipulation and accounting fraud. The group, led by Gautam Adani, already faces regulatory probes in India.