U.S. bribery indictment affects India's Adani Group investments

NEW DELHI, India: India's Adani Group is experiencing significant setbacks globally after its chairman, Gautam Adani, was indicted in the U.S. for alleged bribery and fraud involving Adani Green Energy contracts.

The group has denied the allegations, calling them "baseless," but the indictment has triggered a market value loss of approximately US$33 billion across its 10 listed entities, with Adani Green Energy losing $9.7 billion alone.

Key developments and fallout:

Ratings impact:
Moody's downgraded the outlook for seven Adani entities from 'stable' to 'negative,' citing potential challenges in accessing funding and higher capital costs. Fitch also placed some Adani Group bonds on watch for a possible downgrade.

Andhra Pradesh contract suspension:
India's Andhra Pradesh state is likely to suspend a power purchase deal involving Adani Group. The state plans to request federal authorities and the Solar Energy Corporation of India to investigate the charges.

TotalEnergies halts investments:
French oil giant TotalEnergies, which holds a 20 percent stake in Adani Green Energy, has decided not to make further investments in the group. Bernstein Research estimates TotalEnergies' exposure to Adani firms at $4-5 billion.

U.S. financing review:
The U.S. International Development Finance Corp is reconsidering its $550 million loan for a port development project in Sri Lanka, partly owned by Adani Group. The project had been approved in November 2022.

Sri Lanka's concerns:
Sri Lanka is reviewing its agreements with Adani Group following the allegations but has not made a final decision regarding its projects.

Kenya cancels deals:
Kenya terminated a $2 billion procurement process for managing its main airport, Jomo Kenyatta International, and a separate $736 million energy partnership signed with Adani Energy Solutions.

Bangladesh investigates contracts:
Bangladesh has established a committee to review power generation agreements signed during the tenure of former Prime Minister Sheikh Hasina, including one involving Adani Power.