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The market capitalisation of Adani Group companies rose by nearly Rs 73,000 crore on Monday as investors lapped up shares of the power-to-port conglomerate after BJP’s electoral wins in three states, spurring hopes of regime continuity at the Centre.
The Gautam Adani group’s market map once again neared the Rs 12-trillion mark, following sharp gains made over the past week.
“Two big overhangs for the Adani Group have receded somewhat following the state election results, there is more certainty that the BJP will win a third time next year. Also, last week’s Supreme Court proceedings had sparked optimism that no adverse findings have been established against the group,” said an analyst.
Shares of flagship Adani Enterprises and Adani Ports & SEZ jumped 7 per cent and 6 per cent, respectively. While Adani Green shares closed with 9.5 per cent gains in the stock price, the shares of Ambuja Cements and ACC surged 7 per cent and 6 per cent, respectively.
According to experts, the group’s deleveraging efforts and growth-improved prospects make it an attractive bet.
“Infrastructure companies are expected to clock strong growth given the government’s push. At the Adani group level, we are seeing a doubling of operating profit in 3-4 years. Also, the Ebitda-to-debt ratio stands at only 3x, which is a more comfortable level,” said Deven Choksey, managing director of KRChoksey Holdings.
Last week in Mumbai, Adani Group Chief Financial Officer (CFO) Jugeshinder Singh said that the group desires to invest more and is planning a Rs 7-trillion-spend on infrastructure over the next 10 years.
Till January 24, the group's mcap stood at around Rs 20 trillion. Following the allegations made by the US-based Hindenburg Research, the multinational conglomerate’s market cap had slumped by more than Rs 12 trillion. Currently, it is about Rs 7.25 trillion, below the level before the release of the bombshell report by the US short seller in January.
Last month, the Supreme Court of India reserved its order in the investigations into the matter led by the Securities and Exchange Board of India (Sebi).
During the hearing, the apex court pointed out that the reports and findings by newspapers and portals do not discredit Sebi and its investigation as they cannot be constituted as evidence.
The report by the expert committee formed by the Supreme Court said in May that there had been no regulatory failure and there was “no evident pattern of manipulation” in the Adani firms.
Sebi had submitted to the court that it had concluded investigations in 22 of the 24 matters.
