Adani Green shares snap 4-session losing streak, surge 8%; here’s why

Snapping four session losing streak, shares of Adani Green Energy rallied nearly 8% in intraday trade on Thursday after the Adani group company announced incorporation of step-down subsidiary companies. In the last four sessions, the largecap stock declined over 12% as investors resorted to profit booking at a higher level. Last week, Adani Green shares zoomed 58% amid a slew of positive developments such as victory of the Bharatiya Janata Party (BJP) in three state assembly elections, the U.S. government's clean chit to Adani group, along with Supreme Court's concluded hearings of the Adani-Hindenburg case.

In an exchange filing today, Adani Green Energy Ltd (AGEL) says its Adani Saur Urja Limited and Adani Renewable Energy Holding Nine Limited, subsidiaries of the company, have incorporated their wholly-owned subsidiaries Adani Renewable Energy Fifty-One and Adani Renewable Energy Fifty Five, respectively.

“The main objective of the new subsidiaries is to generate, develop, transform, distribute, transmit, sale, supply any kind of power or electrical energy using wind energy, solar energy or other renewable sources of energy,” AGEL says in the BSE filing.

Adani Saur Urja and Adani Renewable Energy Holding Nine hold 100% share capital of ARE51L and ARE55L, respectively. The new subsidiaries have been set up in Ahmedabad, Gujarat, on December 13, 2023, and are yet to commence their business operations, the filing notes.

Cheering the news, shares of Adani Green rose as much as 7.9% to hit an intraday high of ₹1,540.35 on the BSE. Early today, the Adani stock opened marginally higher at ₹1,432.25 against the previous closing price of ₹1,427.10.

At the time of reporting, Adani Green shares were up 5.15% at ₹1,500.60, while the market capitalisation stood at ₹2.37 lakh crore. At the current level, the counter trades 31% lower than its 52-week high of 2,185.30 touched on January 18, 2023. The stock, however, has rebounded 240% from its 52-week low of 439.35 hit on February 28, 2023, triggered by adverse report by Hindenburg Research released on January 24, 2023.

In the last one year, Adani Green shares have given a negative return of 26%, while it lost 20% in the calendar year 2023. The stock surged 57% in six month period, whereas it gained 58% in just one month.

Earlier this week, Adani Green, in a filing with Singapore’s stock exchange (SGX), said that it would raise funds via a new bond issuance in order to refinance its USD Notes due in September 2024. The company had approached the SGX market with a 3-year bullet senior secured debt of US$ 750 million in September 2021 to fund the capex of some of the underlying under construction projects.

Last week, Adani Green also announced a follow-on funding of $1.36 billion to further boost its construction financing framework to $3 billion, backed by a consortium of international banks.

Besides, billionaire Gautam Adani-led Adani Group plans to invest $100 billion for the green energy transition over a decade. Under the green energy transition initiative, five group companies - Adani Green Energy, Adani Energy Solutions, Adani Ports & SEZ, ACC, and Ambuja Cements - aim to become net zero by 2050 or earlier. The group says the Adani portfolio businesses are “actively engaged in decarbonisation efforts and have pledged to plant 100 million trees by the year 2030”.

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