Adani Group mcap rises to Rs 17.5 trn, highest since Hindenburg incident

Shares of flagship Adani Enterprises rose 8 per cent, followed by Adani Ports, which closed the day with a 4.7 per cent gain

All 10 Adani Group stocks rallied on Thursday, adding Rs 63,282 crore ($760 million) in market capitalisation (mcap), amid overall optimism in the market surrounding the re-election of the incumbent Bharatiya Janata Party government for the third time.

After the latest surge, Gautam Adani Group’s market value has risen to Rs 17.5 trillion ($213 billion), the highest since January 24, 2023 — the day US-based short-seller Hindenburg Research released a scathing report against the group.

Shares of flagship Adani Enterprises (AEL) rose 8 per cent, adding nearly Rs 28,700 crore to the group’s mcap.

Adani Ports and Special Economic Zone (APSEZ) rose 4.7 per cent, and New Delhi Television (NDTV), part of Adani Group, rose 7.6 per cent.

 

The other seven firms saw their market value rise between 1.2 per cent and 2.9 per cent. For comparison, the benchmark National Stock Exchange Nifty gained 1.64 per cent.

The latest gains come even as the Organized Crime and Corruption Reporting Project alleges discrepancies in coal pricing and quality. It alleged that in 2013, Adani Group imported low-quality coal and then sold that same coal to state-owned entities but priced it as high-grade coal.

 

A note by Cantor Fitzgerald said, “The assertion that Adani could buy lower gross calorific value (GCV) coal and sell it as higher GCV coal appears to not be plausible given that testing is done by the buyer and payment is based on testing.”

The brokerage has a price target of Rs 4,338 on AEL with an ‘overweight’ rating.

“From a top-down point of view, India is one of the fastest-growing economies and is heavily investing across a range of end-markets to support continued economic growth, which we believe bodes well for AEL, as it touches nearly every aspect of life in India. From a bottom-up point of view, we believe Adani’s valuation does not fully reflect what we believe the value of its current portfolio of established and incubating businesses to be,” said analysts Brett Knoblauch and Thomas Shinske in a note.

Market experts said the rally in the Adani pack is also on the back of the confidence shown by Prime Minister Narendra Modi over his re-election.

AEL shares also got a boost from the expectations that it will get included in the S&P BSE Sensex during its half-yearly review — the announcement for which is due on Friday.

Following the report, Adani Group’s market value plunged by around 65 per cent, or Rs 12.4 trillion, to below Rs 7 trillion.

Barring Adani Energy Solutions, Adani Total Gas, and Adani Wilmar, most other group stocks have recouped much of the losses since the Hindenburg report.

Shares of Adani Energy currently trade nearly 60 per cent below January 24, 2023, levels, while Adani Total and Adani Wilmar are down 75 per cent and 40 per cent, respectively.

Meanwhile, APSEZ and Adani Power currently trade almost 90 per cent and 160 per cent above their January 24, 2023, levels, respectively.