Adani Group shares surge up to 7%; extend recovery post Maha poll verdict

Last week, shares of Adani Group tanked up to 28% after Gautam Adani, along with other executives, were charged by US prosecutors with bribery, fraud charges.

Shares of Adani Group companies rallied up to 7 per cent on the BSE in Monday’s intra-day trade after a landslide victory of the BJP-led Mahayuti alliance in the Maharashtra legislative elections. In the process, the Adani group stocks continued their recovery - from the US SEC charges fall - for the second straight day.

 

Adani Enterprises, Adani Energy Solutions, Adani Wilmar, Adani Green Energy, Adani Ports and Special Economic Zone, Adani Power, Adani Total Gas, Ambuja Cements and ACC gained between 3 per cent and 7 per cent on the BSE in intra-day trade. Adani Enterprises and Adani Energy Solutions have recovered 14 per cent and 11 per cent, respectively, from their respective 52-week low touched on November 22.

 

At 12:10 pm; most of the group stocks were trading higher in the range of 1 per cent to 4 per cent. However, Adani Green Energy Solutions was down nearly 2 per cent. In comparison, the BSE Sensex was up 1.5 per cent. 

 

The staggering victory of the ruling NDA alliance in Maharashtra should bring the undercurrents back in the markets, according to Motilal Oswal Financial Services.

 

With elections now behind and the BJP getting a strong boost from Haryana and Maharashtra elections, the brokerage firm expects the government to now focus on spending. This poll result, coupled with a recovery in rural spending (on the back of good monsoon and expected strong Kharif output) should improve the demand narrative at the margin. The wedding season in H2FY25 (30 per cent higher weddings YoY) will also provide a fillip to demand, the brokerage firm said.

 

Last week, between November 21 and November 22, Adani Group stocks had tanked by up to 28 per cent after Gautam Adani, along with other executives, were charged by US prosecutors for allegedly bribing ($250 million) Indian officials to secure renewable energy supply contracts.

 

However, the Adani Group has strongly rejected the allegations made by the United States Securities and Exchange Commission (SEC) and the US Department of Justice, regarding charges of fraud and bribery involving several key figures from the conglomerate. In a statement, the group described the allegations as “baseless and denied.”

 

Meanwhile, Adani Group said it has enough cash flows to service debt obligations, as it sought to reassure creditors after a US bribery probe against founder Gautam Adani triggered a selloff in the conglomerate’s stocks and bonds, the Bloomberg reported.

 

Cash balances exceed long-term debt repayments for the next 28 months, while portfolio level cash balances were at $6.33 billion, the port-to-power conglomerate said in a report for the first six months of the financial year ending March 2025. The group said 62 per cent of its total revenue and 84 per cent of earnings before interest, tax, depreciation and amortization were derived from its core infrastructure business.