Adani Stocks Jump Up to 13% After US Court Allows Plea to Dismiss SEC Case

Adani Group stocks surged by up to 13% in intraday trading after a US federal court accepted a plea to consider dismissing a securities fraud case against Gautam Adani and his nephew Sagar Adani, triggering a broad-based rally across the conglomerate’s listed companies.

Stock Market Reaction

Shares across all listed Adani Group companies moved sharply higher following the development. Adani Green Energy and Adani Total Gas led the rally, rising as much as 13% each during the session. The group’s flagship company, Adani Enterprises, gained around 11%.

Ambuja Cements and Adani Energy Solutions hit their 10% upper circuit limits, reflecting strong investor demand. Other major group entities, including Adani Ports, Adani Power, and ACC, recorded gains in the range of 6% to 8%. Media arm NDTV also surged approximately 12%.

The rally coincided with a broader rebound in Indian equities, supported by easing geopolitical tensions following a ceasefire between the United States and Iran, which improved overall market sentiment.

US Court Development

The surge was primarily driven by a decision from the US District Court for the Eastern District of New York, which granted a request filed by the legal counsels of Gautam Adani and Sagar Adani for a pre-motion conference. The conference is a procedural step that allows the defendants to present arguments for dismissing the case before formal motions are filed.

The court has directed both parties to coordinate and schedule the conference. The legal teams representing the Adanis have indicated their intention to formally seek dismissal of the case by April 30.

Grounds for Dismissal

The defence has outlined multiple legal grounds for dismissal of the complaint filed by the US Securities and Exchange Commission (SEC). A central argument is that the US court lacks personal jurisdiction over the defendants, as they are based in India and do not conduct sufficient business activities in the United States to fall under its authority.

Lawyers for the Adanis also argued that the allegations are “impermissibly extraterritorial,” stating that the transactions and conduct in question occurred outside the United States and therefore fall beyond the scope of US securities laws.

The defence further contended that Gautam Adani did not authorise the issuance or sale of the $750 million bond offering at the centre of the case. Similarly, Sagar Adani, an executive director at Adani Green Energy, is said not to have been involved in directing any bond sales in the US market.

According to the legal submission, the bonds were initially sold to non-US underwriters under exemptions such as SEC Rule 144A and Regulation S. These underwriters subsequently resold the securities, potentially including to US-based institutional investors, but without direct involvement from the issuing entity.

Details of the SEC Allegations

The SEC’s case, filed over 15 months ago, alleges that Gautam Adani, Sagar Adani, and others paid approximately $250 million in bribes to unnamed Indian government officials to secure favourable power supply contracts for Adani Green Energy.

Regulators have also claimed that the company failed to disclose these alleged payments while raising capital from US investors, despite highlighting its anti-bribery policies. This omission, according to the SEC, amounted to misleading disclosures and constituted securities fraud.

The defence has rejected these allegations, arguing that the SEC has not established a valid legal claim or demonstrated that US laws apply to the transactions in question. They also noted that the securities were not registered with the SEC and were not traded on US exchanges.

Market Context and Investor Sentiment

The sharp rally in Adani Group stocks highlights the sensitivity of investor sentiment to legal developments surrounding the conglomerate. The group’s shares have experienced significant volatility over the past year amid regulatory scrutiny and global market uncertainties.

The latest court decision, while procedural in nature, has been interpreted by markets as a positive signal, suggesting a potential weakening of the SEC’s case or at least a prolonged legal process.

In addition to the legal relief, improving global cues and easing geopolitical tensions contributed to renewed buying interest in equities, amplifying gains in high-beta stocks such as those within the Adani Group.

Further clarity on the case is expected following the scheduled pre-motion conference and subsequent filings, which will determine whether the court proceeds with the case or dismisses it at an early stage.