A US court indicting Adani Group and its Chairman Gautam Adani for bribing Indian government officials has eroded the combined market value of the group’s stocks by ₹2.6 lakh crore ($30 billion) by 10:45 am on November 21, but that may just be the start of a series of challenges, according to experts.

According to Forbes data, Gautam Adani was worth over $60.9 billion as on November 20 before the sell-off.

“What I am worried about is the implication. Heavy pecuniary fines on Indian companies and reputational issues,” senior advocate HP Ranina told CNBC-TV18. The Indian companies will have to cough up the money for the heavy fines if the Adani Group decides to settle the case in the US. The fine will weigh on the stock prices of the group stocks.

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The Securities and Exchange Commission (SEC) has also accused Gautam and Sagar Adani for bribes worth hundreds of millions of dollars to Indian government officials to secure purchase contracts for Adani green and Azure Power.

Banks that have lent money to the Adani Group have taken a knock too. India’s largest bank, the State Bank of India (SBI), owned by the government, has lost over ₹30,000 crore in market capitalisation for being one of the largest lenders to Gautam Adani’s companies.

CNBC-TV18 asked experts on what other challenges the Indian billionaire, and the rest of the Indian market, could face in the coming days.

Sanjay Asher, Senior Partner, Crawford Bayley & Co, a Mumbai-based law firm, doesn’t believe the indictment to be ‘earth shattering’ and that Adani will be able to settle the matter in the US. “There could be fresh legal challenges that people (in India) with vested interests may initiate,” he added.

There will be political implications too. Adani is already facing an affront from the opposition parties in India who see the billionaire as someone close to the ruling establishment in India.  Rahul Gandhi, a leader of the Indian National Congress, the country’s largest opposition party, has called for a press conference at noon today to raise the ante against both Adani and the Narendra Modi administration.

The indictment of Gautam Adani and others by the Securities and Exchanges Commission (SEC) of the US vindicates the demand that the Indian National Congress has been making since Jan 2023 for a Joint Parliamentary Committee (JPC) investigation into the various Modani scams. The…

— Jairam Ramesh (@Jairam_Ramesh) November 21, 2024

Some don’t rule shareholder activism too. One of the $130 billion Adani Group’s biggest investors, the Florida-based investment firm GQG Partners, has already shed nearly a fifth of its share value on the Australian stock exchange after the US court charge.

“They can file a case for the removal of the concerned people involved in the corruption. Shareholders can say we don’t want certain people in the management. The indictment will be according to the American law. That has nothing to with India,” said Shriram Subramanian, Founder and Managing Director, Ingovern, a Mumbai-based shareholder advisory firm said.

There are also those who believe that the controversy will blow over soon and will not have an prolonged impact on the market overall. “I think markets will forget it in a day, maximum in a week, and then life goes on. That is the way we would approach it, per se. So I won’t read too much into what is happening at this juncture. It is sub-judice. A lot of things will play out. Eventually, we don’t know what conclusions will come through, but I am not anchoring my market view based on incidents like this because I have seen this happening globally over and over again,” Venugopal Garre, MD, India Hd-Research, Bernstein.

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