Abu Dhabi’s IHC maintains outlook on Adani Group shares as shares rise sharply

While the Abu Dhabi conglomerate stated that its outlook on INTERNATIONAL Holding Co’s (IHC) investments in India’s Adani Group has not changed following the US accusation against billionaire Gautam Adani, the company’s shares rose strongly for the second day on Thursday, November 28.

“Our partnership with Adani Group reflects our confidence in their contribution to the green energy and sustainability sectors,” IHC, a major foreign investor in the Indian business group, said in a statement on Wednesday.

“As with all our investments, our team continues to evaluate relevant information and developments. “Currently, our perspective on these investments has not changed.”

Adani Green Energy shares rose 10 percent on Thursday, reaching the gain limit set in a single session for the stock for the second consecutive day.

Adani Energy Solutions also got a maximum increase of 10 percent, while Adani Total Gas, which has a cap of 20 percent, got a gain of about 15 percent.

Adani group share losses narrowed to US$12.5 billion from US$34 billion, the lowest level reached on Tuesday following last week’s US indictments.

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Both houses of India’s parliament were provisionally suspended minutes after opening on Thursday as opposition lawmakers disrupted hearings for the third day of this week demanding discussion of allegations against Adani Group, one of the largest conglomerates in the country.

Last week, US authorities accused Adani, his nephew and chief executive Sagar Adani, and Adani Green’s chief executive Vneet S Jaain of being part of a scheme to pay US$265 million in bribes to secure India’s electricity supply contracts.

Five other Adani employees were charged with conspiracy to violate the Foreign Corrupt Practices Act, the US anti-bribery law, and four with conspiracy to obstruct justice.

The conglomerate that came to power rejected the accusations as “baseless” and promised to “take every possible legal action.”

The government has not commented on the allegations against the group.

Most opposition parties in India accuse Prime Minister Narendra Modi and his Bharatiya Janata Party of supporting Gautam Adani and obstructing investigations against him in India, charges both have denied.

The echoes are increasing

In October last year, IHC increased its stake in Adani Enterprises to over 5 percent after selling its investments in two other Adani companies. At the time, IHC said Adani Enterprises, the group’s flagship, was “uniquely poised to benefit from India’s strong growth journey.”

The increased investment comes after short-seller Hindenburg Research accused the conglomerate of share manipulation and significantly high debt levels in January last year. Adani Group denied these allegations.

Adani Green, the company at the center of the indictment, said on Wednesday that Gautam Adani has been indicted in the United States for allegedly violating securities law and faces potential fines but has not been charged under the U.S. Foreign Corrupt Practices Act.

Adani Green said in a filing to the stock exchange that the U.S. regulator Securities and Exchange Commission’s (SEC) complaint “seeks an order directing the defendants to pay civil penalties (but) does not specify the amount of that penalty.”

The civil lawsuit initiated by the SEC runs parallel to U.S. federal prosecutors’ indictment against Adani and others.

The US accusations are beginning to have repercussions on Adani Group, with rating agencies downgrading some ratings and putting some of the company’s bonds on a negative outlook.

French oil giant TotalEnergies said on Monday it would not invest further in Adani Group until the allegations and their consequences are clarified. Total has a 20 percent stake in Adani Green Energy, and the Adani company said there were no discussions about new investments.

Kenya canceled a US$2 billion acquisition project that would have given Adani control of the country’s main airport and shelved a 30-year, US$736 million public-private partnership signed between Adani Energy Solutions and the energy ministry in October.

Bangladesh is investigating power generation contracts signed during the previous prime minister’s term, one of which was with Adani Power.

Sri Lanka said it would investigate all Adani-related projects in the island nation. REUTERS