MUMBAI (AFP/Web Desk) – Shares in the main listed unit of Indian billionaire Gautam Adani’s conglomerate nosedived 25 per cent on Tuesday, before rebounding slightly, as election results suggested a reduced majority for Prime Minister Narendra Modi’s Bharatiya Janata Party (BJP). Adani is considered a long-time close associate of Hindu-nationalist Modi, both from Gujarat state.
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Opposition parties and other critics have accused Adani of benefitting from their relationship to unfairly win business and avoid proper oversight.
Adani Enterprises pared losses slightly to close down 19 per cent lower at $35.33 (2,950 rupees) per share, down $6.44 from Tuesday’s open.
Read more: India shares dive as polls show Modi's mandate slipping
Shares in other Adani Group companies also crashed, with broadcaster NDTV down 19pc and the conglomerate’s ports division closing 21pc lower.
“When Modi is losing, the stock market says... Adani will go as well,” top opposition leader Rahul Gandhi told a press conference. “This means there is a direct relationship, a relationship of corruption.”
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Adani businesses were the biggest negative movers in what was the Mumbai stock exchange’s worst day since the onset of the coronavirus pandemic four years ago, with the Sensex benchmark closing 5.7pc.
Exit polls had predicted a landslide victory for Modi’s BJP and its allies in this year’s election. But the results show that the alliance could manage only 293 seats.
Although Modi is on course to win a third term, the BJP was unable to get even a simple majority and thus he would have to form a coalition government, unlike the past two terms when his party didn’t require any support from other parties to form the government.
It means a weakened Modi wouldn’t be able to implement his Hindu nationalist agenda freely – with some circle fearing that the over 400 seats target was meant to bring constitutional amendments to change the secular nature of India.
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Last year, Adani Group saw more than $150 billion wiped from its market value after a bombshell report by US investment research firm Hindenburg Research accusing it of “brazen” corporate fraud. The family-run conglomerate’s founder saw his personal fortune collapse by around $80bn as a result, but both Adani and his business have since pared much of those losses as public scrutiny receded.
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Adani Group has denied the allegations of fraud documented in the report, last year calling it a “deliberate attempt” to damage the image of his conglomerate for the benefit of short-sellers.