Mumbai: Adani Group shares surged the most Monday since the publication of the Hindenburg Research report late January, and market capitalisation of Adani listed entities crossed ₹10-lakh crore mark, after a Supreme Court-appointed panel said it had not found ‘regulatory failure’ on allegations of price manipulation in the conglomerate’s stocks and violation of minimum public shareholding rules.
Adani Enterprises – the group’s flagship firm – soared 18.8 per cent, Adani Wilmar jumped 10 per cent and Adani Ports advanced 6 per cent on Monday. Ambuja Cements, Adani Power, Adani Transmission, Adani Green, Adani Total Gas, ACC and NDTV surged 5 per cent each.
By contrast, the Nifty gained 0.6 per cent.
All the Adani stocks have risen between 6 per cent and 23 per cent since Friday when the committee’s report became public. “The high integrity of the members of the panel must have given confidence to investors to buy the beaten-down stocks,” said VK Vijayakumar, chief investment strategist, Geojit Financial Services. “Some short-covering also would have contributed to the rally.”
Boost to Investor Confidence
On March 2, the apex court constituted an expert committee headed by former Supreme Court judge, Justice AM Sapre, after protracted selling in Adani stocks wiped out nearly $150 billion in market value. The panel’s members included veteran bankers OP Bhat and KV Kamath, securities law expert Somasekharan Sundaresan, technology czar Nandan Nilekani, and retired Justice JP Devadhar.
The run-up in the share price on Monday led to the group’s 10 listed companies gaining a total of ₹81,727 crore in market value, catapulting its overall market capitalisation to ₹10.16 lakh crore. At present, only three other Indian entities or conglomerates – Reliance Industries, the Tata Group and the HDFC Group – have combined market value in excess of ₹10 lakh crore.
The Adani Group’s market capitalisation, however, is still down ₹9.03 lakh crore since January 24, when the report was made public. “A lot of the negativity around the Adani stocks is blowing away,” said Kranthi Bathini, director-equity strategy, WealthMills Securities. “While the group has been doing a lot in terms of investor confidence building in the past two months, the committee report on Friday has helped a lot.”
Adani Group shares have managed to cut a portion of the losses since January 25 after US-based short-seller Hindenburg Research released a report accusing the ports-to-power conglomerate of ‘fraudulent’ transactions and share price ‘manipulation.’
The Adani Group has steadfastly denied the allegations.
Earlier, US fund GQG Partners’ investments of ₹15,446 crore in four Adani Group companies helped alleviate some investor concerns.
All Eyes on Sebi Report
To be sure, analysts are still hesitant to conclude whether Adani Group stocks are back to their winning ways.
“It will be too early to say if Adani stocks will go back to their all-time highs,” said Bathini. “That could happen only after the market regulator’s final investigation report is submitted, and if the group manages to sustain the growth momentum.”
From the valuation standpoint, Adani stocks are not undervalued, said Vijayakumar.
Adani Group stocks were under pressure in the early part of last week after global index services provider MSCI announced the removal of two Adani Group stocks – Adani Transmission and Adani Total Gas – from the MSCI Global Standard Index as part of its May rejig.
