Gautam Adani indictment: Moody’s says bribery charges credit negative for Adani group companies

Gaudam Adani indicted in US: Following the US prosecutors’ indictment of Gautam Adani and seven others, including his nephew Sagar Adani, in a bribery case, Moody’s Ratings indicated on Thursday that this development negatively affects the credit status of Adani Group companies.
“The indictment of Adani Group’s chairman and other senior officials on bribery charges is credit negative for the group’s companies,” Moody’s stated.
The ratings agency highlighted that their primary assessment of Adani Group centers on the companies’ capacity to secure capital for meeting liquidity requirements and their governance standards.
US media outlets reported that a judge has issued arrest warrants for Gautam Adani and Sagar Adani, with prosecutors intending to forward these warrants to international law enforcement agencies.
Also Read | Adani Group stocks plunge up to 20% after Gautam Adani’s indictment in US on bribery and fraud charges; Rs 2 lakh crore m-cap wiped out!
Adani group witnessed significant market losses, with two Adani stocks dropping 20% in morning trading. The total market value of all 11 Adani stocks decreased by approximately Rs 2 lakh crore to Rs 12.3 lakh crore, marking its poorest trading performance since the Hindenburg situation in early 2023.
The Ahmedabad-headquartered diversified conglomerate’s main company, Adani Enterprises, experienced a 20% decline to Rs 2,256.20. Similarly, Adani Energy Solutions reached its 20% lower circuit limit at Rs 97.70.
Other group companies faced substantial declines, with Adani Ports and Adani Green declining 19%, whilst Adani Power, ACC, Ambuja Cements, Adani Wilmar, NDTV and Adani Total Gas experienced minimum 10% decreases.
The situation affected bond markets as well, with Adani companies’ dollar bonds showing sharp price reductions. According to LSEG data, Adani Port and Special Economic Zone bonds due in August 2027 decreased by over five cents per dollar.
Adani Electricity Mumbai’s debt, due to mature in February 2030, experienced a decline of nearly eight cents, whilst Adani Transmission’s dollar bonds dropped more than five cents, settling slightly above 80 cents.
Also Read | Gautam Adani charged by US over alleged $250 million bribe plot
These declines marked the most significant drops since February 2023, following Hindenburg Research’s publication of a critical report that scrutinised the group’s debt levels and their utilisation of tax havens, according to an ET report.
The situation prompted Adani bull GQG Partners to address the matter, indicating they were assessing the emerging information to determine appropriate portfolio actions.
GQG said: “We are monitoring the charges brought today by the US Attorney’s Office for the Eastern District of New York and the US Securities and Exchange Commission against Gautam Adani and certain other Adani Group executives and companies. Our team is reviewing the emerging details and determining what, if any, actions for our portfolios are appropriate.”
The firm clarified that their portfolio construction guidelines ensure diversified investments, with over 90% of client assets invested in entities unrelated to the Adani Group.
Following these developments, GQG’s stock value decreased by 26% on the Australian exchange where it is listed.