Adani Stocks Plunge Up to 13% on US SEC Probe, Weak Earnings

Introduction

Shares of Adani Group companies experienced a significant downturn on Friday, with some stocks falling by as much as 13%. The sharp decline was triggered by a combination of adverse news, including reports of an ongoing investigation by the U.S. Securities and Exchange Commission (SEC) and weak quarterly financial results from several group entities. The dual pressures created a negative sentiment among investors, leading to a broad-based sell-off across the conglomerate's listed firms and impacting the wider market indices.

US Regulatory Scrutiny Intensifies

The primary catalyst for the stock market rout was a report detailing the SEC's efforts to serve summons to the conglomerate's chairman, Gautam Adani, and his nephew, Sagar Adani. The U.S. regulator has reportedly sought permission from a court in Brooklyn, New York, to serve the summons via email. This move comes after the SEC stated it was unable to secure assistance from Indian authorities for the delivery.

The legal action stems from a lawsuit filed in November 2024. The allegations involve purported violations of U.S. securities laws, including making false and misleading statements related to Adani Green Energy Ltd. The case also references an alleged USD 265-million bribery scheme intended to secure favorable terms for solar power contracts. The persistence of U.S. authorities in pursuing the case has heightened investor concerns about potential legal and financial repercussions for the group.

Disappointing Quarterly Performance

Compounding the regulatory woes were the underwhelming financial results posted by key Adani companies for the December 2025 quarter. Adani Green Energy Ltd. was the worst performer, with its stock tanking 13.20% to close at Rs 785. The company reported a consolidated net profit of just Rs 5 crore, marking a staggering 99% year-on-year decline from the Rs 474 crore profit recorded in the same quarter of the previous fiscal year.

Similarly, Adani Energy Solutions Ltd (AESL) saw its shares tumble by 10.57% to Rs 827.20. The company posted an 8% decline in its consolidated net profit, which stood at Rs 574.06 crore for the quarter. The firm attributed the drop primarily to higher tax expenses. The stock also hit its lower circuit level during the trading session, indicating intense selling pressure.

Widespread Market Impact

The negative sentiment was not confined to a few companies but spread across the entire Adani Group. The flagship firm, Adani Enterprises, plunged 9.38%, while Adani Ports and Adani Power dropped 7.81% and 8.84%, respectively. The sell-off extended to other group entities, including its cement and media businesses.

The turmoil in Adani stocks contributed to a broader market decline. The 30-share BSE Sensex plunged 769.67 points to settle at 81,537.70, and the Nifty 50 index dropped 241.25 points to close at 25,048.65.

Adani Group's Official Stance

In response to the developments, the Adani Group has vehemently denied the allegations. A group spokesperson issued a statement calling the claims made by the U.S. Department of Justice and the SEC "baseless." The company affirmed its compliance with all applicable laws and stated that it would seek all possible legal recourse to defend itself against the charges. The group's firm denial aims to reassure stakeholders, but the ongoing legal process in the U.S. remains a significant overhang for investors.

Analysis and Outlook

The confluence of a high-profile international regulatory investigation and poor domestic earnings has created a challenging environment for the Adani Group. The SEC's determination to proceed with its case, despite reported difficulties in securing cooperation, suggests that legal headwinds will persist. For investors, the key concerns are the potential for financial penalties and the reputational damage arising from the allegations. Furthermore, the weak quarterly results, particularly the sharp profit erosion at Adani Green Energy, raise questions about the operational performance and profitability of its growth-focused ventures.

Conclusion

The sharp fall in Adani Group stocks underscores investor sensitivity to regulatory risks and financial performance. The market will be closely monitoring the legal proceedings in the United States and the group's strategic response to both the allegations and its operational challenges. Until there is greater clarity on these fronts, volatility in Adani Group shares is likely to continue.