Indian billionaire Gautam Adani, one of Asia's richest men, may be facing his biggest challenge yet with an indictment by U.S. prosecutors for alleged fraud and bribery. But it's unclear just how the case will affect his businesses and own future — as well as the Indian economy and government.

On Friday, shares in some of the Adani Group's companies began ticking back up after plunging a day earlier following the announcement of the charges in New York. The stock prices of six of his 10 listed companies rose slightly, between one per cent to nearly four per cent.

Adani, a major power player in India perceived as close to Prime Minister Narendra Modi, was charged Wednesday with securities fraud and conspiracy to commit securities and wire fraud at a court in Brooklyn, N.Y.

The test for the tycoon and his multibillion-dollar empire, which encompasses everything from energy and ports to media and agriculture, comes just after the 62-year-old founder and his holdings had bounced back after losing more than $60 billion in market value in early 2023 following allegations of stock price manipulation and fraud by the short-selling firm Hindenburg Research.

It also raises questions about corporate governance and crony capitalism in India's economy, which Modi has vowed to make the world's third-largest, and intensified scrutiny on the outsized influence of large, family-run conglomerates. Asia's richest man is another Indian billionaire, Mukesh Ambani of Reliance Industries.

Prosecutors allege that Adani duped investors in a massive solar project in India by concealing that it was being facilitated by bribes. Seven other executives connected to Adani's massive business holdings also face charges, including three executives from Quebec's largest pension fund, Caisse de dépôt et placement du Québec (CDPQ).

The indictment outlines an alleged scheme to pay about $265 million in bribes to government officials in India.

The CDPQ executives, Cyril Cabanes, Saurabh Agarwal and Deepak Malhotra, are reportedly accused of obstructing a grand jury, the FBI, and the U.S. Securities Exchange Commission.

Group denies allegations against green energy arm

The Adani group denied the allegations against directors of Adani Green Energy, its renewable energy arm, as "baseless" and said they will be seeking legal recourse. Shares in Adani's green energy venture, which is at the centre of the case, dropped eight per cent on Friday.

None of the people charged in the case have been arrested.

"For Adani, this hits hard, no matter how you slice it," said Michael Kugelman, director of the South Asia Institute at the Wilson Center. 

"His public relations machine was in overdrive for nearly two years rehabilitating his image following the Hindenburg allegations. This indictment came like a bolt from the blue and instantly reversed all recent progress in salvaging his reputation and business empire," Kugelman said.

Adani's imprint across the Indian economy runs deep. He is the country's largest operator of coal mines and infrastructure developer, operates several ports and airports, and employs tens of thousands of people. Despite his fossil fuel roots, Adani has ambitions to become the world's largest player in renewable energy by 2030.

WATCH | How Adani Group lost half its stock value after fraud accusations: 

India’s Adani Group loses half its stock value after fraud accusations

Indian billionaire Gautam Adani saw his net worth rapidly plummet after accusations of fraud triggered a steep drop in stock prices for his group of companies, Adani Group. Now, protestors and opposition parties are calling for an investigation.

Analysts say a key factor in his meteoric rise over the years has been his knack for aligning his group's priorities with those of the Modi government, investing in key industries like renewable energy, defence and agriculture. Before Modi, Adani was friendly with other parties in power.

The latest controversy is likely to put Modi's Bharatiya Janata Party-led government, seen as close to Adani, in an awkward spot.

Amit Malviya, the BJP's IT head, said in a post on X that the U.S. charges are "allegations and the defendants are presumed innocent unless and until proven guilty," which critics interpreted as a show of support for the Adani group.

The main opposition party has seized on the controversy, demanding Adani's arrest and accusing Modi, who has at times campaigned using an Adani jet, of protecting him. Opposition lawmakers are likely to escalate pressure on Modi when the winter session of parliament begins next week.

The controversy has already affected Adani's interests overseas.

Kenya's president cancelled multimillion-dollar deals with the Adani group for airport modernization and energy projects. Adani is likely to also face scrutiny in Bangladesh, where a court on Tuesday ordered an inquiry into an energy project.

His troubles might complicate India's ties with other countries, such as Sri Lanka, where New Delhi is competing with rival Beijing for strategically important markets.

There's no doubt this is "bad timing for New Delhi," said Kugelman, as it comes at a moment "when it's trying to capitalize on the business world's desire to move production out of China and find alternate investment destinations."

Could Trump intervene?

As for India-U.S. ties, some analysts believe president-elect Donald Trump may intervene.

"India would like nothing more than for Trump to halt the investigation once he takes office. That's unlikely. Trump, however, could take a positive view of Adani, a fellow businessman who has praised Trump effusively," said Kugelman.

The case highlights business risks in India, though experts believe the impact on investors will be limited mainly to the Adani group.

"There are no fears of a financial contagion — at this point, the effect is centred on the group rather than the market. It could slow down the group's expansion and growth as it will become more difficult for Adani to raise funds," said Ambareesh Baliga, an independent market analyst.

Still, for many in India, the news isn't that startling.

Investors already know "just how ingrained this (bribes and corruption) is in the fabric of the Indian economy — you can't miss it," Baliga said. "Initially, investors may stay away for a while but at the end of the day, they will come back (to Adani). This isn't some small or medium-sized group they can ignore."