The Adani Group, a leading Indian conglomerate, is under increasing scrutiny after US authorities indicted its founder, Gautam Adani, and several executives for alleged involvement in a $265 million bribery scheme.
The accusations have triggered a series of financial and reputational setbacks, including a potential bond downgrade by Fitch Ratings and intensified scrutiny of its global projects.
Sri Lanka’s finance and foreign ministries are assessing the impact of the US charges, which allege bribery to secure lucrative power contracts. Adani Ports, which holds a 51% stake in a new container terminal in Colombo, is directly affected by the review. The Sri Lankan government has not provided a timeline for its decision but emphasized that it is considering all aspects of Adani-related projects.
The US International Development Finance Corporation (DFC), which previously committed $553 million to support the Sri Lankan port, is also reevaluating its agreements in light of the accusations.
On Tuesday, Fitch placed several Adani Group bonds on a “negative watch,” signaling heightened corporate governance concerns and the potential for a downgrade. The action affects senior unsecured bonds issued by subsidiaries such as Adani Ports, Adani Energy Solutions, and Adani Electricity Mumbai. The move could significantly impact the conglomerate’s access to international funding.
Ratings agency S&P Global has similarly warned of potential downgrades for Adani Ports, Adani Green Energy, and Adani Electricity, citing the US indictment as a significant risk factor.
Since the indictment, Adani Group stocks have suffered losses exceeding $33 billion in market value. Adani Green Energy has been hit the hardest, shedding over $9.7 billion in value, while flagship Adani Enterprises and other subsidiaries have seen double-digit declines. Although Adani dollar bonds stabilized slightly on Tuesday after three days of declines, market uncertainty persists.
Major investors and partners have also begun reevaluating their ties with Adani. French energy giant TotalEnergies announced a halt to new investments linked to Adani Group projects until the allegations are clarified. Similarly, Kenyan President William Ruto canceled $2.5 billion worth of Adani airport and electricity deals.
The US Department of Justice (DOJ) accuses Adani executives of misleading investors and violating anti-bribery laws while raising over $3 billion to fund energy contracts. The Securities and Exchange Commission (SEC) has summoned Gautam Adani and other executives for questioning. Adani Group has dismissed the allegations as baseless and pledged to pursue legal recourse.
In India, opposition leaders are calling for Gautam Adani’s arrest, while the Supreme Court is being petitioned to initiate a domestic investigation. The accusations have reignited political tensions, with disruptions in parliament over demands for a debate on the matter.
The Adani Group faces significant hurdles as it seeks to restore investor confidence and maintain global operations. Analysts warn that the bribery charges could constrain the group’s access to offshore capital markets and raise borrowing costs.
