Adani wipeout impacts, but won’t shake foreign investor confidence in India.

Global investors believe that while the bribery charges against the Adani Group may temporarily impact sentiment in India, they won’t affect the country’s long-term investment outlook. Allegations from the U.S., denied by Adani, accuse the conglomerate of paying bribes and misleading disclosures, causing a dip in the group’s stock and bond values.

Despite concerns over governance and transparency, investors remain optimistic about India’s growth potential, particularly its expanding economy and large consumer market. While some caution may emerge regarding Indian companies’ governance practices, the broader market remains resilient, with the Nifty 50 index up by 3% since the news broke.

Foreign investors, who hold less than 20% of India’s $5.5 trillion equity market, continue to view India as an attractive alternative to a stalled China. The Sensex has more than doubled since the pandemic lows, and money managers believe that the Adani issue is a “stock-specific” event that won’t derail India’s growth trajectory. Foreign investment flows have stabilized after a brief pullback in October.