Sri Lanka's government has launched a review of U.S. bribery allegations against the Adani Group, adding to the mounting pressure on the Indian conglomerate following the indictment of its founder, Gautam Adani, and other key executives. U.S. prosecutors accuse Adani and his associates of a $265-million scheme to bribe Indian officials for power supply contracts. Adani Ports, which owns 51% of a major Colombo container terminal project in Sri Lanka, now faces scrutiny from the country’s finance and foreign ministries, raising questions about the future of its investments in the region.
In parallel, the fallout is shaking financial markets, with Fitch Ratings placing several Adani bonds on a "negative watch" for potential downgrades. Bonds linked to Adani Energy Solutions, Adani Ports, and Adani Electricity Mumbai are under threat, with four senior unsecured dollar bonds already downgraded to a negative outlook. Adani stocks have collectively lost $33 billion in market value since the indictments, with Adani Green Energy suffering the largest hit, shedding nearly $9.7 billion in value.
The indictments have also led to broader corporate consequences, with TotalEnergies, a French oil giant and key partner, suspending further financial contributions to Adani investments. Adani Green Energy downplayed the impact, stating that no new financial commitments were expected from TotalEnergies. Meanwhile, Australia-based GQG Partners, a major backer of Adani, expressed continued confidence in the group’s operations but acknowledged that the scandal could hinder access to foreign funding if new capital is needed.
Amid this turmoil, U.S. and global markets are closely watching the developments. Fitch warned that further deterioration in Adani’s financial stability or credit access could have cascading effects on the conglomerate’s ability to roll over debts or secure new funding. ESG ratings provider Morningstar Sustainalytics has also flagged the scandal as a potential governance risk, signaling potential long-term repercussions for Adani’s sustainability credentials.
Despite some recovery in Adani’s dollar bonds after three days of sharp declines, the group remains under intense scrutiny. With the Sri Lankan government’s review ongoing and global agencies like Fitch and S&P placing Adani assets on watch, the conglomerate’s future is uncertain. Investors and analysts are closely monitoring whether the Indian government will continue its support for Gautam Adani amid rising international and domestic pressures.
