Adani Stocks Rally Over 4% After Sharp Decline Last Week; What's Behind The Rally?

Adani Stocks: Nearly all Adani stocks surged by over 3 per cent during the morning trading session on Wednesday after the conglomerate issued a statement, denying the bribery charges placed against group chairman Gautam Adani and his nephew Sagar Adani.

The flagship company of the conglomerate, Adani Enterprises, surged by over 3 per cent, trading at Rs 2,221.95 price level on the National Stock Exchange.

Adani Green, the renewable arm of the conglomerate, was trading at Rs 920 price level, up by 2.39 per cent at 10:30 am.

"(There are many media reports) which state that certain of our directors namely Mr. Gautam Adani, Mr. Sagar Adani and Mr. Vneet Jaain have been charged with violation(s) of the U.S. Foreign Corrupt Practices Act (FCPA) in the indictment. Such statements are incorrect. Mr. Gautam Adani, Mr. Sagar Adani and Mr. Vneet Jaain have not been charged with any violation of the FCPA in the counts set forth in the indictment of the US DOJ or civil complaint of the US SEC," the release said.

Why are Adani Stocks up?

All group companies witnessed a major decline last week after accusations of bribery were made against the group chairman and others.

Adani's renewable arm, Adani Green Energy, experienced the sharpest decline on the bourses and was down by over 30 per cent last week.

However, investor sentiment did change a bit on Wednesday after the company issued a statement and clarified its side.

While the company has refuted the charges under the FCPA, it confirmed that the directors have been indicted on three counts: securities fraud conspiracy, wire fraud conspiracy and securities fraud.

"These directors have been charged on three counts in the criminal indictment namely (i) alleged securities fraud conspiracy, (ii) alleged wire fraud conspiracy, and (iii) alleged securities fraud," the company release further added.

At 10:45 am, the shares of Adani Enterprises were trading at Rs 2,226.70 price level, up by over 3.5 per cent on the National Stock Exchange.