Adani Group stocks took a sharp beating in Thursday's trade with the flagship entity -- Adani Enterprises -- cracking as much as 23 per cent. Akshay Bhagwat, Senior Vice-President, Derivatives Research at JM Financial Services, in an exclusive interaction with Business Today, said, "This is the second time (after Hindenburg Research) that the Adani stocks are receiving a jolt in the market due to the serious allegations levied on the group. Looking at the price actions, one thing is clear this is not taken well by the short-term traders. In the futures and options (F&O) space, there's more downside for Adani Ports and Adani Enterprises. Refrain from taking a position in the futures segment."
In terms of the current scenario, wait for the dust to settle before putting fresh funds into these stocks, he advised market participants. "From a short-term perspective, there could be more pain ahead. However, one can stay invested but only with a long-term view, given the past recovery seen in these counters," Bhagwat added.
Today's steep fall in the Adani stocks came after Adani Group's chair Gautam Adani was indicted in the US over bribery and fraud charges. US authorities said Adani and seven other defendants, including his nephew Sagar Adani, agreed to pay bribes to Indian government officials to obtain contracts expected to yield $2 billion of profit over 20 years and develop India's largest solar power plant project.
Prosecutors said the Adanis and another executive at Adani Green Energy, former CEO Vneet Jaain, raised more than $3 billion in loans and bonds by hiding their corruption from lenders and investors. Gautam Adani, Sagar Adani and Jaain were charged with securities fraud, securities fraud conspiracy and wire fraud conspiracy, and the Adanis were also charged in a US Securities and Exchange Commission civil case.
In response, Adani Green said in a BSE filing, "The United States Department of Justice and the United States Securities and Exchange Commission have issued a criminal indictment and brought a civil complaint, respectively, in the United States District Court for the Eastern District of New York, against our Board members, Gautam Adani and Sagar Adani. The United States Department of Justice has also included our Board member, Vneet Jaain, in such criminal indictment. In light of these developments, our subsidiaries have presently decided not to proceed with the proposed USD-denominated bond offerings."
The fresh charges follow much turmoil for the Adani Group in January last year when US-based short seller Hindenburg Research accused it of using offshore tax havens improperly - a charge that the Indian conglomerate has denied.