Alongside of the stock, the shares of Adani Green Energy too, hit their 10% upper circuit.
Around 10:30 am, other Adani Group stocks like Adani Enterprises were trading 5% higher and Adani Port up by 2%. Adani Power shares were up by 9.4% and Adani Wilmar was up 3%.
The rally came in after the group clarified that its executives, including Gautam Adani and his nephew Sagar Adani, have not been indicted on bribery charges by US authorities noting that the US actions have caused “significant repercussions including- international project cancellations, financial market impact and sudden examination from strategic partners, investors, and the public”.
The trouble for the group came in when the U.S. prosecutors in New York indicted Gautam Adani, his nephew Sagar Adani, and six others on allegations of bribery and fraud. The indictment accuses the group of offering $265 million in bribes to Indian officials to secure solar contracts, potentially yielding $2 billion in profits over 20 years.
As per the case by the US Securities and Exchange Commission, Gautam Adani has been charged with allegedly “defrauding American investors and bribing officials”. Adani, his nephew Sagar Adani, 30, executives of Adani Green Energy, and Cyril Cabanes, an executive of Azure Power Global Ltd were charged with “conspiracy to commit securities and wire fraud, as well as substantive securities fraud, for their roles in a multi-billion-dollar scheme to obtain funds from US investors and global financial institutions through false and misleading statements”.The indictment says Adani and the others paid approximately $265 million in bribes. They expected these contracts to generate $2 billion in profit over two decades. Prosecutors claim some involved in the scheme used code names like “Numero uno” and “the big man” to refer to Gautam Adani.Also read: Paytm shares rise 3%, hit new 52-week high after UBS hikes target price to Rs 1,000
The indictment also alleges Adani, his nephew Sagar Adani, and another executive, Vneet Jaain, hid bribes from lenders and investors to secure over $3 billion in loans and bonds for Adani Green Energy.
“This indictment alleges schemes to pay over USD 250 million in bribes to Indian government officials, to lie to investors and banks to raise billions of dollars, and to obstruct justice,” said Deputy Assistant Attorney General Lisa H Miller.
“These offences were allegedly committed by senior executives and directors to obtain and finance massive state energy supply contracts through corruption and fraud at the expense of US investors,” she added.
Following this update, the group attracted the attention of various rating agencies. ICRA reaffirmed its credit rating of Commercial Papers as ICRA A1+, while India Ratings & Research reaffirmed the credit ratings of the Company and its operating subsidiaries as debt rated at ‘IND AA+’/Stable.
Moody’s had changed its rating outlook from ‘stable’ to ‘negative’ for the Adani Group companies and Fitch placed Adani Energy Solutions long term foreign- and local-currency issuer default Ratings of ‘BBB-‘ and the ‘BBB-‘ ratings on Adani Electricity Mumbai Limited’s (AEML) senior secured notes on Rating Watch Negative (RWN).
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