Adani group market cap recovers 46% from year’s low; 23% below pre-Hindenburg level

The surge in Adani Group stocks boosted Chairman Gautam Adani’s wealth by over $10 billion, reaching a fortune exceeding $70 billion according to the Bloomberg Billionaires Index

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Despite the sharp surge in shares after the Supreme Court observations on the Hindenburg case and the BJP win in three states, Adani Group’s market cap is about 23 percent below its previous record of around Rs 20 lakh crore, reached before the Hindenburg Research report published on January 24.

Since the Hindenburg report until now, Adani Ports SEZ and Adani Power Ltd have remained unaffected. In fact, both have seen gains of 37 percent and 107 percent, respectively. These stocks were surged nearly 13 percent and 200 percent in 2022.

The group’s flagship Adani Enterprises was slated for a mega fundraise before the Hindenburg report forced the group to withdraw its follow-on offer. The stock was trading at Rs 3,440 a share and the follow-on offer upper band price at Rs 3,276 at that time. Currently, the stock trades 14 percent below its price on January 23, a day before the report became public.

Other stocks of the group, Adani Total Gas Ltd and Adani Energy Solutions Ltd, traded 74 percent and 56 percent respectively below their levels before the Hindenburg report. Adani Green Energy Ltd, and Adani Wilmar Ltd are currently 18 percent, and 30 percent lower than their levels before the Hindenburg report, respectively, while ACC is 8 percent away.

Read: Adani Ports shares jump 7% to hit fresh record high on Citi’s target price upgrade

Meanwhile, Ambuja Cements Ltd and NDTV have gained 3.2 percent and 1.2 percent during this period.

Since November, Adani Group stocks increased by nearly Rs 4.7 lakh crore or 46 percent, pushing its market cap to Rs 14.8 lakh crore. Factors behind this surge include relief from India’s Supreme Court and the US government’s dismissal of the Hindenburg report, which boosted investor confidence.

Recently, the US International Development Finance Corporation invested $553 million in Adani Ports’ Colombo terminal project. Additionally, Bloomberg reported that the U.S. government dismissed Hindenburg Research’s fraud accusations against the Adani Group as unfounded.

Also on December 5, Adani Green Energy said it secured a $1.36 billion follow-on funding through a senior debt facility, marking its largest project financing yet under the Construction Financing Framework, improving sentiments among investors. This adds up to a total funding pool of $3 billion since the initial project financing in March 2021. The framework is supported by a consortium of international banks.

On November 24 the Supreme Court reserved judgment on public interest lawsuits against SEBI over Hindenburg’s allegations. Chief Justice DY Chandrachud emphasized not automatically accepting Hindenburg’s claims as true. Adani Group maintains that the report recycled allegations, creating a “selective and manipulative” narrative from known facts to mislead.

Read: CLSA downgrades Bajaj Auto, Hero Moto, Eicher Motors amid valuation concerns

The Adani Group plans a Rs 7 lakh crore capital expenditure over the next decade for expanding its infrastructure business. In a recent presentation by CFO Jugeshinder Singh, six companies, including power, ports, and airports, aim to utilize bond markets for funding. Around 80 percent of funding will come from global debt issuances, with the remainder from domestic sources. Singh emphasized the group’s focus on capital efficiency, prioritizing higher-margin infrastructure businesses over fast-moving consumer goods.

The surge in Adani Group stocks boosted Chairman Gautam Adani’s wealth by over $10 billion, reaching a fortune exceeding $70 billion according to the Bloomberg Billionaires Index. This propelled him to the 16th position in the global rich list.

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