News reports suggest that The Adani Group will revive its US investment plans after President Donald Trump has suspended the enforcement of the Foreign Corrupt Practices Act (FCPA).
The ports-to-energy conglomerate had earlier pledged US$10 billion to numerous American infrastructure projects.
However, it put its plans when the US Department of Justice (DOJ) indicted its founder Gautam Adani, and several associates of committing bribery. Based on industry reports, the recent Indian stock market crash caused a 20% decline in Gautam Adani’s net worth. This has further exacerbated challenges for the company.
The court alleged that during 2020-2024, Adani and his co-defendants paid $265 million worth of bribes to several Indian government officials. His alleged objective was to secure important solar energy projects with a profit potential of over US$2 billion. The American authorities had also accused the Adani Group of misleading American investors by not disclosing these practices.
The allegations forced Adani Green Energy to withdraw its projects from countries like Kenya. Thus, this news had wider repercussions for the company in foreign markets as well. TotalEnergies, a key investor, also paused new investments in the company.
This legal scrutiny had compounded the company’s challenges arising from the Hindenburg Research report. It had accused The Adani Group of corporate fraud and stock manipulation. This had severely impacted the company’s overall market valuation.
As per the International Energy Agency, India’s electricity demand is expected to grow at a rate of 6% annually in the coming years. By subsidising local manufacturers and restricting Chinese imports, the government increased its solar power production capacity by 6x during 2021-23. However, the growth of India’s solar power industry seems to be slowing down.
The Indian government established the Solar Energy Corporation of India in 2011. Its objective was to enable state utility companies to manage their financial woes better. Howvever, American authorities allege that the SECI awarded 12GW solar energy project to the Adani Group after receiving a hefty bribe.
Currently, solar power installation in India is 11GW. The country had aimed to create 40 GW by 2022. This puts it far behind countries like Australia and Brazil.
Adani Green Energy is India’s biggest renewable energy company. It is developing one of the globe’s largest clean energy projects in Gujarat’s salt deserts. Once completed, they will produce nearly 30 GW of electricity, thereby powering around 18 million homes.
AGEL aims to produce 50 GW of renewable energy by 2030. Currently, its projects are ongoing across 12 Indian states, with a total power generation capacity of 11.6 GW. Some of its popular projects include:
As the US government has frozen FCPA enforcement, The Adani Group is expected to revive its investments in the American economy. This is expected to have a favourable impact on its ongoing projects in countries like Sri Lanka and Kenya. As the company renews its projects in India, the solar industry is expected to revive itself and record sustained growth in the coming years.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks, read all the related documents carefully before investing.
Published on: Mar 12, 2025, 12:55 PM IST
We're Live on WhatsApp! Join our channel for market insights & updates
Get the link to download the App
