Adani Group shares in free fall today. What should investors do?

Adani Enterprises Ltd experienced a dramatic share price collapse on Thursday, with stocks plunging as much as 23% to a day-low of Rs 2,171.60. The steep decline comes in the wake of bribery allegations against Group Chair Gautam Adani, creating market turbulence and raising critical questions for investors.
US authorities have levelled serious charges against Gautam Adani, his nephew Sagar Adani, and former Adani Green Energy CEO Vneet Jaain, accusing them of securities fraud, bribery, and conspiracy.
Prosecutors allege the group raised over $3 billion in loans and bonds by concealing corruption from lenders and investors, with arrest warrants already issued.
In response to the mounting legal pressures, Adani Green Energy has announced it will not proceed with proposed USD-denominated bond offerings, further complicating the group’s financial landscape.
Global ratings agency Moody’s said the development is “credit negative” for Adani Group companies. “The indictment of Adani Group’s chairman and other senior officials on bribery charges is credit negative for the group’s companies,” Moody’s said in a statement.
Moody’s further said the primary focus in evaluating the Adani Group centers on its companies’ capacity to secure capital for liquidity needs and their governance practices.
Market experts advise caution. “Adani Group shares are high-beta in nature. Investors should remain in ‘wait-and-watch’ mode, given the current heightened volatility,” Kranthi Bathini, Director of Equity Strategy at WealthMills Securities told Business Today.
Technical analysts also paint a challenging picture. Osho Krishan from Angel One told the publication that the “sharp decline is alarming as the stock has retraced to levels last observed in November 2023.”
Short-term price projections vary, but most analysts see significant downside risk. Ravi Singh from Religare Broking told Business Today that the stock “can slip towards Rs 2,000 level in the near term,” while technical analysts suggest a trading range between Rs 2,000 and Rs 2,500.
Meanwhile for risk-tolerant investors, Sebi-registered research analyst AR Ramachandran advised a nuanced perspective: investors should consider buying only if the stock closes above Rs 2,540, with a potential upside target of Rs 2,817.
These developments follow the January 2023 Hindenburg Research report that initially challenged the Adani Group’s financial practices – a claim the conglomerate has consistently denied.
(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)