Shares of ACC and Ambuja Cements, the two cement companies that were acquired by the Adani Group in 2022, have showcased a much more resilient performance amid the ongoing rout in Adani Group stocks.
Shares of Ambuja rose nearly 12 percent, in two straight sessions while most other Adani group stocks continued to crumble under pressure. The rebound in the stock came after the 16 percent plunge witnessed on February 1.
A greater level of transparency in business, cashflows on their balance sheets and a history of resilient performance are some reasons pointed out by experts that may have safeguarded the two cement stocks.
ACC and Ambuja have been listed entities for a much longer time and have an established history of greater transparency and performance. So in such a scenario, the sentimental damage that has been seen for other Adani group companies has not hit them so hard, believes Vinit Bolinjkar, Head of Research, Ventura Securities.
Meanwhile, the Adani takeover of these companies is a fairly recent deal which has not given the former much time to bring in any major changes to the businesses of ACC and Ambuja, Bolinjkar added.
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Apart from that, the major concern for investors was the buzz that the acquisition of the two cement companies was done through pledged shares. Since the Adani group came forward and nullified such rumours, it sort of pacified investors of the two cement stocks, said Siddhartha Khemka, Head of Research (Retail), Motilal Oswal Financial Services.
"We would like to clarify that none of the shares of Ambuja or ACC has been pledged by promoters," Adani Group had said in a statement on February 2.
Amit Kumar Gupta, Founder and Chief Investment Officer of Fintrekk Capital pointed out another key reason for the resilient performance of these two stocks. The fact that these two stocks have the most institutional holding within the entire Adani pack has largely been a reason why investors have more confidence in these stocks, Gupta said.
Ambuja Cements and ACC have an institutional holding of 27.65 percent and 30.61 percent as per their shareholding data as on December 31, 2022. The institutional holdings in these companies are higher than any other stock within the Adani Group's kitty.
"These stocks are also not priced at very expensive valuations and have a greater degree of transparency which has been seen in the past several years. These companies also have cash on their books and hence can very well support the prices," Gupta said.
Shares of ACC settled around 5 percent higher while those of Ambuja Cements ended with 6 percent gains on February 3.
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