Adani Group Stocks Witness Sharp Decline Amid SEC Legal Proceedings
Shares of Adani group companies experienced significant downward pressure on Friday, with several stocks plunging as much as 13% in a single trading session. This dramatic sell-off came in response to reports indicating that the US Securities and Exchange Commission (SEC) has approached a New York court seeking permission to serve summons to group chairman Gautam Adani and executive Sagar Adani. The legal action is connected to an alleged fraud and a substantial $265-million bribery case that has captured market attention.
Market Capitalisation Erodes by Billions
The widespread selling pressure wiped out an estimated $12.5 billion in market capitalisation from the Adani conglomerate, according to Reuters reports. This substantial erosion of value contributed to broader weakness in domestic equities, creating a ripple effect across the Indian stock market. The timing of the SEC filing appears to have unsettled investors who had previously assumed regulatory matters were resolved, creating unexpected volatility in trading patterns.
Individual Stock Performance Highlights
Adani Enterprises, the flagship firm of the conglomerate, dropped as much as 10.65% during the session and emerged among the top losers on the Nifty 50 index. On the Bombay Stock Exchange (BSE), the stock declined 9.38% to settle at Rs 1,891.60. Other major group companies followed this downward trajectory with Adani Power declining 8.84% to Rs 128.35, Adani Ports sliding 7.81% to Rs 1,303.35, and Adani Total Gas dropping 7.55% to Rs 507. Notably, Adani Ports emerged as the biggest loser on the Sensex index.
Adani Green Energy Ltd experienced particularly severe pressure, plunging 13.20% to Rs 785. This decline followed the company's report of a consolidated net profit of just Rs 5 crore for the December quarter of 2025, representing a dramatic 99% year-on-year fall from Rs 474 crore recorded during the same period a year earlier. Similarly, shares of Adani Energy Solutions Ltd fell 10.57% to Rs 827.20 and hit a lower circuit after the company reported an over 8% decline in quarterly net profit to Rs 574.06 crore, primarily attributed to higher tax expenses.
Broader Group Impact and Market Sentiment
The selling pressure extended beyond core Adani companies to other group-associated stocks. Ambuja Cements fell 5.98%, Sanghi Industries dropped 5.96%, NDTV slipped 5.31%, and ACC declined 2.76%. Market participants noted that the timing of the SEC filing created uncertainty among investors who had assumed regulatory matters were settled. "Market participants assumed there's nothing pending and that the group has been cleared, so the SEC filing seems to have come out of the blue," Ambareesh Baliga, an independent market analyst, told Reuters. He added that with no clear timeline for resolution, the issue could continue to weigh on market sentiment in the near term.
SEC Seeks Alternative Service Methods
According to court filings cited in various reports, the US SEC informed a Brooklyn court that it has been unable to secure assistance from Indian authorities to deliver summons to Gautam Adani and Sagar Adani through traditional channels. The regulatory body has now sought court approval to serve these legal notices via email, highlighting the international complexities of the case. The lawsuit, which was unsealed in November 2024, alleges that Adani group executives violated US securities laws by making false and misleading statements specifically related to Adani Green Energy Ltd.
The legal action further claims that these executives participated in a scheme to pay bribes to Indian officials with the objective of securing favourable solar power contracts. US law explicitly prohibits foreign companies that raise capital from American investors from paying bribes overseas or soliciting investments through misleading disclosures, creating the legal foundation for the SEC's actions.
Adani Group Response and Legal Position
The Adani group has categorically denied all allegations, describing them as baseless and without merit. A group spokesperson stated, "The allegations made by the US Department of Justice and the US Securities and Exchange Commission against directors of Adani Green are baseless and denied," as quoted by PTI. The conglomerate emphasized its compliance with all applicable laws and indicated its intention to pursue all possible legal remedies to address what it considers unfounded accusations.
Broader Market Impact
The uncertainty surrounding the Adani group contributed to broader market weakness, with the BSE Sensex falling 769.67 points to close at 81,537.70. Similarly, the NSE Nifty dropped 241.25 points to settle at 25,048.65. This parallel decline suggests that the Adani situation had spillover effects on overall market sentiment, reflecting the conglomerate's significant weight in Indian equity indices and its importance to the broader economic landscape.
