Adani Ports Share Price Sees 16.57% Drop Amid Bribery Charges and Legal Challenges

Adani Ports share price saw a significant decline in its share price, falling by 16.57% to ₹1,075.90 as of 12:03 PM IST on November 21, 2024. The stock opened at ₹1,160.70 and reached a high of ₹1,160.70 before dipping to a low of ₹995.65 during the trading session. Over the past year, the stock has traded between ₹785.00 and ₹1,621.40, reflecting its volatility.

Major Drops in Adani Stocks

Shares of Adani Group companies saw a sharp decline after US prosecutors charged Gautam Adani and other executives with bribery related to securing solar energy contracts in India.

Adani Enterprises share price experienced the largest fall, dropping by over 20%. Adani Ports shares fell by over 16%, while Adani Energy Solutions shares saw a 20% decline. Other companies in the group, including Adani Total Gas share price  (over -12%), Adani Power share price (over -11%), and Adani Wilmar share price (obver -10%), also faced significant losses. 

Bribery Charges Explained

The sell-off was sparked by an indictment from US prosecutors in Brooklyn, accusing Gautam Adani, Sagar Adani, and Vneet Jaain of running a $250 million bribery scheme. The charges claim they paid bribes to secure solar energy contracts in India and made false statements to US investors. They are also accused of obstructing justice by deleting electronic records and misleading US agencies such as the Department of Justice (DOJ), the Securities and Exchange Commission (SEC), and the FBI. In addition, the SEC has filed a civil lawsuit against the Adani Group.

In response to the charges, Adani Green issued a statement saying that the DOJ and SEC had filed criminal and civil cases against Gautam Adani, Sagar Adani, and Vneet Jaain. The statement also mentioned that the group’s subsidiaries had decided to pause their plans to issue USD-denominated bonds due to the legal developments.

Financial Highlights

Adani Ports reported a net profit of ₹2,445 crore for the second quarter of the financial year 2025 (Q2FY25), marking a 39.9% increase compared to the same period last year, although it fell short of analysts’ expectations. The growth in profit was driven by a rise in cargo volumes and ongoing capacity expansions at Gopalpur, Vizhinjam, and Colombo ports.

In Q2FY25, the company handled 111 million metric tonnes (MMT) of cargo, a 10% increase year-on-year. Cargo volume grew by 9.7% in July, 5% in August, and 14% in September, despite a weeks-long shutdown at Gangavaram port in southern India due to a workers’ strike. APSEZ’s revenue from operations for the quarter stood at ₹7,067.02 crore, up 6.33%. Total expenses for the quarter declined slightly by about 1%, totalling ₹4,433.96 crore.

The company’s earnings before interest, tax, depreciation, and amortisation (EBITDA) for the quarter were ₹4,369 crore, reflecting a 13% year-on-year growth. Sequentially, net profit declined by 21.5%, while revenue saw a small rise of 1.6%.

About Adani Ports

Adani Ports & Special Economic Zone develops, operates, and maintains port infrastructure, including port services and related facilities. It also manages a multi-product Special Economic Zone (SEZ) and associated infrastructure near the Mundra Port.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.