Adani Group stocks extended their rally on Monday, in sync with the benchmark indices, as investors cheered the Bharatiya Janata Party's (BJP) victory in three state assembly elections. The better-than-expected performance of the BJP in Hindi heartland - Madhya Pradesh, Rajasthan and Chhattisgarh – has raised hopes that Prime Minister Narendra Modi-led party's comeback to power for the third time in the 2024 Lok Sabha elections.
Shares of the billionaire Gautam Adani-led companies which have maintained an uptrend since last week following the Supreme Court's concluded hearings of the Adani-Hindenburg case, surged between 6-14% intraday. Early today, all ten group stocks opened in green, led by Adani Green Energy, Adani Power, and Adani Energy Solutions, in line with the broader market. The BSE benchmark Sensex rallied as much as 1,106 points in early trade to touch a new high of 68,588, while the broader Nifty50 surged 335 points to 20,602 marks as investors celebrated BJP’s big gains in state assembly elections.
Among the group stocks, Adani Green Energy was the top performer with a 14.7% gain in intraday trade, followed by 13.9% and 12.4% surge in Adani Energy Solutions, and Adani Power, respectively. The group’s flagship company Adani Enterprises gained as much as 10% today, while Adani Wilmar and Adani Ports & SEZ rose up to 7%. Among others, cement stocks ACC and Ambuja Cements climbed up to 7%, while NDTV added 7% intraday.
Driven by a broad-based rise in all ten listed entities, the cumulative market capitalisation (m-cap) of Adani group companies crossed ₹12 lakh crore, reclaiming this crucial mark after a long gap of 10 months. In the last one week, the group’s m-cap has increased nearly 1.7 lakh crore from ₹10.27 lakh crore at the end of trade on November 24. The net worth of group chairman Gautam Adani also increased by $5.6 billion (₹46,663 crore) in a week on the back of sustained rally in Adani stocks.
On January 24, 2023, when the Hindenburg Research report came out accusing it of financial fraud and stock manipulation, the market capitalisation of Adani Group was ₹19.18 lakh crore. Since then, the power-to-port conglomerate witnessed sharp erosion in its market value in the aftermath of Hindenburg’s report and slipped below ₹12,000 lakh crore marks on January 31, and further down to ₹7,000 lakh crore in February. However, Adani Group stocks made some recovery after the group took corrective measures to improve liquidity positions and pare the group’s debts.
Recently, Adani group stocks saw a surge in buying activity after the Supreme Court concluded hearings on several petitions demanding a court-monitored probe into the allegations of accounting fraud and stock manipulation made by U.S.-based short-seller Hindenburg Research on November 24. The capital market regulator Securities and Exchange Board of India (SEBI), who was probing Hindenburg’s allegations as well as Adani Group's related-party dealings, also informed the apex court that it didn’t require additional time to complete its investigation into the matter.
During the hearing, the three-judge panel, led by Chief Justice of India DY Chandrachud, said that they didn’t find reason to doubt SEBI’s investigation into Hindenburg's allegations of stock manipulation. The court said that the court cannot treat Hindenburg's report as a “true state of affairs”, and that is why we asked the SEBI to probe into the matter. "We don't have to treat the Hindenburg report as being a statement of truth. There is no means of testing the veracity of the Hindenburg report and hence asked Sebi to probe," it said.
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