Adani Enterprises Ltd suffered a dramatic share price crash on Thursday, with shares falling as much as 23% to Rs 2,171.60. This steep decline came in the wake of bribery allegations against Group Chairman Gautam Adani; These claims create turbulence in the market and raise critical questions for investors.

US authorities have leveled serious allegations against Gautam Adani, his nephew Sagar Adani and former Adani Green Energy CEO Vneet Jaain. accusing them of securities fraud, bribery and conspiracy.

Prosecutors allege the group raised more than $3 billion in loans and bonds by hiding corruption from lenders and investors, and arrest warrants were issued.

In response to increasing legal pressures, Adani Green Energy says it will not move forward Proposed US dollar-denominated bond offerings further complicate the group’s financial situation.

Global rating agency Moody’s said the development was “credit negative” for Adani Group companies. “The indictment of Adani Group’s chairman and other senior officials on bribery charges has a negative reputation for the group’s companies,” Moody’s said in a statement. he said.

Moody’s also said its primary focus in evaluating Adani Group is on its companies’ ability to raise capital for liquidity needs and its governance practices.

Market experts advise caution. “Adani Group shares are high beta in nature. Given the current increased volatility, investors should remain in ‘wait and watch’ mode,” Kranthi Bathini, Director, Equity Strategy, WealthMills Securities, told Business Today.

Technical analysts also paint a challenging picture. Angel One’s Osho Krishan told the publication that “the sharp decline is concerning as the stock is back to levels last observed in November 2023.”

Short-term price forecasts vary, but most analysts see significant downside risk. Religare Broking’s Ravi Singh told Business Today that the stock “could fall to the Rs 2,000 level in the near term”, while technical analysts suggest a trading range between Rs 2,000 and Rs 2,500.

Meanwhile, for risk-tolerant investors, Sebi-listed research analyst AR Ramachandran suggested a nuanced view: Investors should consider buying only if the stock closes above Rs 2,540, with a potential upside target of Rs 2,817.

These developments follow the January 2023 Hindenburg Research report: Initially challenged Adani Group’s financial practices – a claim that the holding has consistently denied.

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