Shares of Adani Group companies witnessed a sharp rally on Monday, rising by up to 6% during intraday trade. This was due to reports that the US administration under Donald Trump is moving to drop certain foreign bribery-related investigations. The market responded positively to this development, triggering renewed investor interest in Adani stocks.
Market Reaction and Stock Movement
In a buoyant trading session, Adani Power surged 6% to reach ₹548, marking a significant uptick from its previous closing. Other Adani Group entities, including Adani Green, Adani Energy Solutions, Adani Enterprises, Adani Ports, and NDTV, also recorded gains in the range of 4-5%.
The broader markets mirrored this momentum, with both the Sensex and Nifty indices posting gains of over 2%, indicating a strong market-wide rally.
What Sparked the Rally?
As The Wall Street Journal has reported, the Trump administration is pulling back on enforcement of some white-collar crime statutes. These include enforcement actions involving foreign bribery, public corruption, money laundering, and cryptocurrency market cases. The article indicated that, in at least some cases, officials are redefining what is a prosecutable offense.
The Adani Group’s stocks appear to have reacted to this shift, as past investigations into the conglomerate reportedly included alleged violations of the US Foreign Corrupt Practices Act (FCPA), a law enacted nearly 50 years ago to curb overseas bribery.
Background on the Allegations
The FCPA had been a point of contention for Adani Group after US prosecutors allegedly scrutinized claims that Gautam Adani, along with certain associates, may have planned or executed bribes exceeding $250 million to Indian public officials to secure energy contracts. The group was also accused of manipulating records to secure investments from Wall Street. However, Gautam Adani and the Adani Group had categorically denied all such allegations, terming them baseless.
In February 2025, Trump signed an executive order halting several FCPA-related prosecutions, which set the stage for this latest development. As per reports, the withdrawal of some of these cases has now been formalized.
Investor Sentiment Turns Positive
Following months of stock market volatility, which earlier this year had seen Adani Group stocks plummet by up to 48%, investors are seemingly regaining confidence. The easing of legal pressure from US authorities is seen as a relief rally trigger, especially amid a broader market recovery after global concerns over US tariffs also showed signs of easing.
Outlook
While this rally offers short-term relief, analysts caution that long-term stability in Adani stocks will depend on operational performance, debt restructuring efforts, and resolution of other regulatory challenges. As of now, the market seems to be embracing any news that suggests a more favorable global legal climate for the embattled Indian conglomerate.
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