Day after U.S. court rap, Adani energy firms’ stocks sink further

A pedestrian watches a digital broadcast on the facade of the Bombay Stock Exchange in Mumbai on November 22, 2024.
| Photo Credit: AFP

A day after the Adani Group faced its worst market hammering since Hindenburg Research’s allegations in early 2023, six group stocks, including those of flagship Adani Enterprises Ltd. (AEL), recorded a mild recovery on Friday (November 22, 2024) but its energy businesses sank further into the red.

Adani Green Energy, which is at the centre of a fresh storm of bribery charges and securities fraud after an U.S. court’s indictment of group promoter Gautam Adani and several associates, fell 8.2% on the Bombay Stock Exchange (BSE) on top of a 19% drop the previous day. The group’s other energy-related firms, Adani Energy Solutions and Adani Power, also fell 6.9% and 3.23%, respectively.

This slide coincided with the sharpest single day surge in the broader Nifty 50 index in over five months, as it bounced 2.4% higher to close at 23,907 points, after slipping to a fresh five-month low on Thursday. The 30-share BSE Sensex saw a slightly faster uptick of 2.54% to close at 79,117 points, breaking a generally downward trajectory witnessed at the bourses in recent weeks after the benchmark indices had hit all-time highs in late September.

Stocks of the Mr. Adani-helmed conglomerate’s flagship, AEL, rose about 2.1% to a little over ₹2,229 per share, rising slower than the benchmark indices after an over 23% collapse on Thursday. Adani Ports and SEZs moved up 2.1%, and Adani Total Gas closed 1.5% higher on the BSE on Friday. The group’s cement stocks, ACC and Ambuja Cement, fared better, rising 3.3% and 3.8%, respectively.

“Nifty recorded the best single day gain since in over five months and cash market volumes inched up to ₹.1.01 lakh crore. Broad market indices rose less than the Nifty even as the advance decline ratio rose sharply,” noted Deepak Jasani, head of retail research at HDFC Securities.

Global cues provided some relief as oil prices rose, with the Brent crude up 1.95% to $74.23 per barrel amid geopolitical tensions between Russia and Ukraine. The dollar index climbed to a 13-month high of 107, supported by strong labour market data in the U.S., while the Rupee appreciated marginally to close at 84.45 per dollar, from Thursday’s record low of 84.5, pointed out Vikram Kasat, head–advisory at Prabhudas Lilladher.

Meanwhile, in a fresh setback to the Adani Group, S&P Global Ratings altered its outlook on three of its entities to “negative” from “stable” on Friday (November 22, 2024), citing risks to funding access following the U.S. indictment.