Indian shares drop as Adani firms tumble on US bribery charges against group chairman

India’s benchmark equity indexes fell on Thursday, dragged down by a plunge in Adani Group company stocks after U.S. authorities indicted Gautam Adani, the conglomerate’s chairman, over his alleged role in a $265 million bribery scheme.

The NSE Nifty 50 lost 0.72% to 23,349.9, while the BSE Sensex fell 0.54% to 77,155.79.

U.S. authorities said Gautam Adani and seven other defendants, including his nephew Sagar Adani, agreed to bribe Indian government officials to win contracts expected to yield $2 billion of profit over 20 years, and develop India’s largest solar power plant project.

Adani Group called the allegations “baseless”, adding that it would seek “all possible legal recourse”.

Shares of Adani Enterprises, the group’s flagship company, sank 22.61% while Adani Ports lost 13.57%. They were the top drags in the Nifty.

All the other eight group stocks declined between 0.6% and 20%, with the group companies losing about $27 billion in combined market value during the session.

“Investors will be skeptical on Adani Group because this is another big blow for its credibility after Hindenberg report in January 2023,” said Avinash Gorakshakar, head of research of Profitmart Securities. The news, which had triggered a sharp fall in dollar bond prices of Adani-linked companies, also pulled down shares in other sectors.

Indian tycoon Gautam Adani charged in US over $265 million bribery scheme

Ten of the 13 major sectors posted losses, with state-owned lenders shedding 2.7% amid concerns over lenders’ exposure to the conglomerate.

The spillover from Adani’s indictment has compounded worries in a market already reeling under foreign outflows and weak corporate earnings. The Nifty and the Sensex have lost 3.5% and 2.8%, respectively, in November so far.

The broader, more domestically focused small- and mid-caps lost about 0.4% each.

Among other stocks, Mamaearth parent Honasa Consumer fell 10%, extending its decline to 36% over three sessions after reporting a loss in the September quarter.

Concerns over the company’s “stock dumping practices” flagged by All India Consumer Products Distributors Federation also weighed, two analysts said.