Adani Group Rout: US Legal Woes Erase Over ₹1.1 Lakh Crore

Introduction: A Sharp Reversal for Adani Stocks

The Adani Group faced a severe downturn in the Indian stock market on Friday, January 23, 2026, as a confluence of negative news sparked a massive sell-off. The conglomerate's listed entities saw their combined market capitalisation erode by more than ₹1.1 lakh crore in a single trading session. This sharp decline was triggered by renewed legal pressure from the United States Securities and Exchange Commission (SEC) concerning an ongoing investigation into allegations of bribery and securities fraud. The negative sentiment was further amplified by disappointing quarterly results from its green energy arm, casting a shadow over the entire group and weighing on the broader market indices.

The Catalyst: US SEC Escalates Legal Action

The immediate trigger for the market rout was the SEC's latest move in a civil case initiated in November 2024. The US regulator approached a federal court in New York, seeking permission to serve legal summons directly via email to Chairman Gautam Adani and his nephew, Sagar Adani. This step was taken after two previous attempts to serve the summons through official international channels were rejected by India’s Ministry of Law on procedural grounds. The SEC's persistence signals its determination to proceed with the case, a development that investors interpreted as a significant escalation of regulatory heat and a source of prolonged legal uncertainty.

Core Allegations Under Scrutiny

The SEC's investigation centres on serious allegations against the conglomerate. The primary claims involve a purported $165 million bribery scheme intended to secure solar power contracts in India. Additionally, the regulator alleges that the group misled American investors through bond issuances totalling $150 million by failing to disclose material information related to its anti-corruption practices. These actions, if proven, would constitute violations of US securities laws, exposing the group to potential penalties and reputational damage in international markets.

Broad-Based Sell-Off Across Adani Stocks

The market's reaction was swift and widespread, affecting nearly all listed companies within the Adani ecosystem. The flagship firm, Adani Enterprises, saw its shares tumble by nearly 11%. Other major entities like Adani Energy Solutions, Adani Power, and Adani Ports also recorded steep declines of 5% to 10%. The negative sentiment spilled over to group-affiliated companies, with Ambuja Cements and NDTV closing more than 5% lower, indicating deep-seated investor nervousness about the group's corporate governance and legal challenges.

Adani Green Energy's Compounded Troubles

Adani Green Energy was the hardest-hit stock, plunging over 14% during the session. The company faced a dual blow. Besides the overarching SEC investigation, it reported a staggering 99% year-on-year drop in its consolidated net profit for the quarter ending December 31, 2025. The company posted a net loss of ₹41 crore, a sharp reversal from the ₹492 crore profit reported in the same period a year earlier. This poor financial performance, driven by higher finance costs and expenses, exacerbated the sell-off and intensified concerns about the company's financial health.

Key Developments at a Glance

Market Impact and Investor Sentiment

The sell-off in Adani stocks had a noticeable impact on the broader Indian market, with the Sensex and Nifty indices closing significantly lower. The episode revived memories of the Hindenburg Research report, which had previously caused extreme volatility in the group's shares. Market analysts noted that the SEC's filing seemed to catch investors by surprise, as many had assumed that regulatory scrutiny had subsided. The development has reintroduced a significant risk premium for Adani stocks, with investors now closely watching for further legal updates from the US.

Adani Group's Official Response

In response to the developments, the Adani Group has consistently and strongly denied all allegations. The conglomerate issued a statement calling the claims "baseless" and reiterated its firm commitment to the highest standards of governance, transparency, and regulatory compliance. The group has affirmed its intention to pursue all available legal remedies to defend itself against the charges, assuring stakeholders of its adherence to the law in all jurisdictions where it operates.

Analysis: Lingering Uncertainty and Regulatory Headwinds

The core issue for investors is the lingering uncertainty. Legal proceedings, especially those involving international regulators like the SEC, can be lengthy and unpredictable. The inability to forecast the outcome, potential financial penalties, or any operational restrictions creates a challenging environment for valuation. This uncertainty is likely to keep the stocks volatile in the near term. The market will be looking for clarity on whether the US court grants the SEC's request and what the subsequent steps in the legal process will be.

Conclusion: What Lies Ahead for Adani Group

The sharp erosion in market value underscores investor sensitivity to corporate governance and regulatory risks. The Adani Group is once again under intense scrutiny, and its path forward will be heavily influenced by the proceedings in the US legal system. The upcoming decision from the New York court on the SEC's request to serve summons will be a critical event. Until there is a clear resolution, investor sentiment will likely remain cautious, with the conglomerate's stock performance closely tied to every new development in this high-profile case.