The ten listed Adani Group firms saw their combined market capitalisation climb a whopping Rs 1.73 lakh crore in the past four trading sessions till March 3.
The stocks were in news amid reports of Adani securing a $3-billion loan earlier this week, which Adani denied later. The stocks gained as the promoter group sold shares of four companies worth Rs 15,446 crore to US boutique investment firm GQG Partners. The investment from Rajiv Jain-led GQG Partners was the first big investment in Adani Group firms since US short seller Hindenburg Research’s scathing report on January 24, easing investor concerns over fundraising.
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Overall, the market valuation of Adani Group companies jumped to Rs 8.55 lakh crore on March 3 from Rs 6.82 lakh crore on February 27. This is, however, still far lower than the combined value of Rs 19.20 lakh crore the Adani Group companies commanded as on January 24.
In the last four sessions, shares of Adani Enterprises Ltd soared the most. The stock was up 57.37 per cent at Rs 1,879.35 at Friday’s closing from Rs 1,194.20 as on February 27.
It was followed by Adani Ports and Special Economic Zone (up 21.77 per cent), Adani Wilmar (up 21.53 per cent), Adani Green Energy (up 21.53 per cent), Adani Power (up 21.47 per cent) and New Delhi Television (up 21.47 per cent). Ambuja Cements, ACC, Adani Transmission and Adani Total Gas also gained somewhere between 9 per cent and 19 per cent during the same period.
GQG Partners on Thursday bought shares worth Rs 15,446 crore ($1.87 billion) in four Adani firms, namely Adani Ports and Special Economic Zone, Adani Green Energy, Adani Transmission and Adani Enterprises through block deals. Meanwhile, Adani Green Energy (AGEL), the renewables arm of the Adani group, on Friday said that its fourth wind-solar hybrid power plant is fully operational at Jaisalmer in Rajasthan and the asset has been capitalised. The combined operational generation capacity of this newly added hybrid power plant is 700 MW and has a power purchase agreement (PPA) at Rs 3.24 per kwh for 25 years. With the successful operationalisation of the 700 MW plant, the world’s largest wind-solar hybrid power plant, AGEL now has the largest operating renewable portfolio in India with 8,024 MW.
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Sharing his views on Adani stocks, Abhishek Agarwal, Managing Partner Rockstud Capital said: “I think there was an overreaction on Adani Group companies after the Hindenburg report. Adani’s success is not overnight. Leverage in debt or dilution of equity is the tool for funding the growth of the business. No default history, no corporate governance red flags from Sebi or similar governing agencies, and no real evidence to many claims of the report. Certainly, the report has caused massive financial and reputation damage to their stock and bonds. They are forced to early repayments of loans to avoid pledge revoke on their shares. The bounce back will happen surely, and the present turmoil is temporary.”
Vinit Bolinjkar, Head of Research, Ventura Securities said, “Adani Enterprises are at fair valuation right now. The stock can hit Rs 2,000 given the cash flow which is emanating from the existing business. Adani Ports is another extremely undervalued company. India’s trading will pick up and there is no better bet than Adani Ports considering India’s exim trade is going to take off. The stock may double in the next 2 years.”
However, Bolinjkar is watching Adani Green at present. “If the company (Adani Green) gets some refinance for further projects, then the signal will be green for the stock. Adani Transmission is also available at a good valuation.”
Sharing his views on Ambuja Cements, the market analysts said that the cement company is also fairly valued. “It needs to be seen how much efficiency can be infused into the company by the Adani group. I would give one more quarter before entering into this stock.”
