It has been exactly one year since the release of a scathing report on Adani Group by short seller Hindenburg Research, and seven of the Group's 10 stocks are trading below the levels seen a year ago. Three Group stocks including Adani Ports have sailed above the pre-Hindenburg prices.
On January 24, 2023, Hindenburg published a report that alleged non-compliance of minimum public shareholding, non-disclosures of related party transactions, or stock price manipulation, among others. The Group repeatedly denies these allegations.
The report led to a sharp fall in share price of its listed entities, eroding over Rs 12 lakh crore in market value within a month. Many stocks are yet to come out of that shock as of today.
Adani Total Gas is the biggest victim, with the stock still trading down 74 percent from year-ago level. Adani Energy Solutions and Adani Wilmar are the next two worst performers – still down 62 percent and 39 percent, respectively.
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Adani Enterprises, which had to cancel an FPO in January last year, has recovered much of the losses but still trades 15 percent below last year’s price. Adani Green Energy, New Delhi Television and ACC are down 5-12 percent. Ambuja Cement is up 5 percent compared to last year.
This is despite the Group’s stocks having regained their vigour following the Indian Supreme Court’s verdict rejecting appeals for a federal probe or special investigation into Adani’s businesses, or the port it is building in Sri Lanka.
However, three stocks are trading much above their year-ago levels. Adani Power has not just recouped losses but also zoomed another 89 percent. This has happened amid a rally in most power stocks as investors are anticipating India’s power consumption to rise. Adani Ports and Special Economic Zone is another big gainer that is up about 50 percent from last year’s level.
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Both these firms got large investments from GQG Partners. The investment firm bought shares when they were at their 52-week lows. It has now reaped rewards after the stock prices have rebounded.
Among other investors in the Group companies have been QIA, which invested $474 million in Adani Green Energy in August last year and Total that invested $300 million in Adani Green in September. International Development Finance Corp also said it examined Hindenburg’s allegations before signing off on half-a-billion-dollar funding for an Adani port terminal in Sri Lanka.
These backing, along with some positive steps taken by the Group including change of auditor, regular communication with bondholders, etc. – have helped build a positivity about the stock.
As of December-end, Adani Ports had 19 ‘Buy’ calls, and 2 ‘hold’ calls. It has zero sell call from analysts, reflecting an overwhelming positivity.
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