 "Adani, Adani Group")
Shares of all the 10 listed companies of the Adani Group surged on Monday, posting their biggest daily gains since the Hindenburg report on January 24. An interim report by the Supreme Court (SC)-appointed panel on Friday did not find any conclusive evidence to support allegations made by the US short seller could have been the trigger.
As a result, the combined market capitalisation (m-cap) of the 10 Adani Group stocks rose by Rs 82,000 crore, extending the two-day gains to Rs 1.15 trillion.
Flagship Adani Enterprises surged the most at 18.8 per cent, followed by Adani Wilmar at 10 per cent and Adani Ports and SEZ by 6 per cent. The other seven group stocks rose by 5 per cent each.
Analysts said that the SC panel's findings have boosted investor confidence towards the beleaguered port-to-power conglomerate. They said the report is the beginning of a significant step forward for the group and will help the Gautam Adani Group push ahead with its proposed Rs 21,000-crore fundraise plan.
The group’s m-cap reclaimed the Rs 10-trillion mark on Monday. During the peak of the selloff -- triggered by the Hindenburg report -- the group’s m-cap had declined to Rs 6.82 trillion on February 27. At its peak, the Gujarat-based conglomerates’ m-cap was nearly Rs 23 trillion. At the current level of Rs 10.2 trillion, it is still 56 per cent below the peak but 50 per cent above this year’s low.
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"Markets seem to rejoice that there is tentative clean chit," said UR Bhat, cofounder of Alphaniti Fintech.
“The high integrity of the members of the panel must have given confidence to investors to buy the beaten down stocks. Some short covering also would have contributed to the rally. However, from the valuation perspective, Adani stocks are not undervalued,” added VK Vijayakumar, chief investment strategist, Geojit Financial Services.
The interim report, which came into the public domain on Friday, did not make any adverse observations against the Adani promoters. It further noted that there was no regulatory failure on the part of the Securities and Exchange Board of India (Sebi), concerning the way it has dealt with the affairs of the group.
Sebi, however, is still probing the allegations of alleged violations of the minimum public shareholding and related party transaction (RPT) norms. The apex court has given Sebi time till August 14 to finish its probe.
“It doesn't look like a complete clean chit. The stocks of cement and port businesses of the group looked reasonably valued. The other stocks do not seem like compelling buys considering the valuations,” added Bhat.
Earlier this month, Adani Enterprises and Adani Transmission announced that they would raise Rs 12,500 crore and Rs 8,500 crore, respectively, mostly through the qualified institutional placement (QIP) route.
In January, the group had to abort its Rs 20,000 crore follow-on public (FPO) offering after a scathing report by Hindenburg Research.
Last week, brokerage firm Jefferies deep-dived into the conglomerate’s eight listed entities and their foray into new business segments such as green hydrogen, data centres, aerospace and water infrastructure. The report stated that Adani Enterprises was well positioned to nurture next generation businesses using cash flow from established businesses.
