Gautam Adani’s empire is in freefall after his bombshell indictment by the US government on bribery charges.
A basket of 11 Adani companies has tanked nearly 12% on average since the news broke — and it’s only gotten worse. No dead-cat bounce in sight for Adani Green Energy or Adani Energy Solutions.
Fast forward to Monday, and the slump hadn’t only lingered, it had deepened. Why? Well, the fallout has been swift and brutal since the indictment:
- Fitch has put Adani Energy bonds on “watch negative,” a precursor to a potential downgrade.
- Moody’s downgraded its outlook for seven Adani firms to negative.
- TotalEnergies, the French energy giant with a 19.75% stake in Adani Green Energy, paused its partnerships, claiming it wasn’t informed about the US investigation.
- Bangladesh has hired investigators to review Adani’s power projects, and Sri Lanka is reassessing a port development backed by the conglomerate.
- Even Andhra Pradesh, a key Indian state, is revisiting old deals signed during its previous administration.
Dive into the dip?
If you’re hoping to buy the dip, think again. Adani stocks are still reeling from the January 2023 Hindenburg report, with some taking over 18 months to recover. The current mess — bribery charges, deal pullbacks, and looming downgrades — only adds to the pain.
The cascading bad news isn’t just bad PR — it’s a financial noose tightening around the group. Fitch warns that increased corporate governance risks could hurt Adani’s access to funding and liquidity. This spells trouble for ongoing projects, which are now at risk of delays, or worse, cancellations.
For now, the Adani Group looks more like a red flag than an opportunity. Investors are better off staying on the sidelines until the dust settles — and that could take a while.
