Adani Green Energy Shares Decline Amid US Bribery Allegations

Shares of Adani Green Energy Ltd fell by nearly 3% on Monday following a report suggesting that bribery charges against Gautam Adani in the US are backed by documents that could strengthen the prosecution’s case. Despite this, the report noted that the Indian billionaire is unlikely to face extradition to the US for trial anytime soon, according to Reuters.

Stock Performance

Current Session: Adani Green Energy stock dropped 2.85%, closing at ₹1,165.50 on the BSE, compared to the previous close of ₹1,199.75.
Market Cap: The market capitalization of the company fell to ₹1.85 lakh crore.
Trading Volume: Around 3.04 lakh shares were traded, resulting in a turnover of ₹36.02 crore.

Year-to-Date and Long-Term Trends

The stock has declined 26.75% in 2024 and is down 23.25% over the past year.
It reached a 52-week high of ₹2,173.65 on June 3, 2024, and a 52-week low of ₹870.90 on November 27, 2024.
The stock’s high beta of 1.7 indicates significant volatility over the past year.

Bribery Allegations

A recent US indictment accused Indian officials of accepting $265 million in bribes between 2021 and 2022 to secure solar power contracts in several states, including Andhra Pradesh. Of this amount, $228 million was allegedly used to influence Andhra Pradesh’s state electricity distribution companies, which subsequently committed to purchasing around seven gigawatts of solar power—the largest agreement by any Indian state.

The Economic Times reported that India’s power sector regulator has questioned the Solar Energy Corporation of India (SECI) about substituting Azure Power with Adani Green Energy as the developer for 2,333 MW of solar power allocated to Andhra Pradesh.

Adani Group’s Response

In a statement issued in late November, Adani Green Energy clarified:

Gautam Adani, Sagar Adani, and Vneet Jaain have not been charged with any violations under the US Foreign Corrupt Practices Act (FCPA).
The bribery allegations outlined in the US Department of Justice (DoJ) indictment and US Securities and Exchange Commission (SEC) civil complaint pertain only to officials of Azure Power and CDPQ, not Adani Group executives.

Despite this clarification, the allegations continue to weigh heavily on market sentiment, contributing to the stock’s recent decline.

Conclusion

Adani Green Energy is navigating a challenging phase amid these allegations, as its stock performance reflects investor concerns. While the company has denied involvement in the bribery scandal, scrutiny from regulators and potential reputational risks may keep the stock under pressure in the near term.