Adani Group Faces Another Blow as Sri Lanka Cancels Power Purchase Agreement Over Bribery Allegations

The Adani Group, led by billionaire Gautam Adani, has suffered a major setback as Sri Lanka reportedly canceled a power purchase agreement (PPA) with the company. The cancellation follows allegations of bribery involving the group in a U.S. court. Adani Power's stock fell by 2.01% on the BSE, trading at ₹511, while Adani Green Energy dropped by 0.24% to ₹1019.
Allegations and Sri Lanka's Decision
As per AFP, Sri Lanka's new president, Anura Kumara Dissanayake, ordered an investigation into the local projects of Adani Group when the allegations of bribery were reported. It was due to this investigation that the previous government of Sri Lanka cancelled a deal it had signed in May 2024 to purchase electricity from the wind power plant owned by Adani in northwestern Sri Lanka. The rate at which electricity was to be bought was fixed at $0.0826 per kilowatt.
The cancellation aligns with Dissanayake’s campaign promise to investigate and potentially annul deals awarded to the Adani Group. The move comes amidst heightened scrutiny of Adani's global operations following corruption claims.
Impact on Adani Group Shares
The news led to a decline in Adani Group stocks, with seven out of eleven shares trading in the red. Adani Wilmar suffered the highest loss of nearly 4%, while Adani Total Gas, Adani Power, and Adani Energy Solutions fell by 2-3%. The flagship company, Adani Enterprises, also saw a drop of nearly 2%.