No Hindenburg effect: Adani Group stocks recover after OCCRP reports, mcap hits Rs 11 trillion

• Market capitalisation of Adani Group companies hit Rs 11 trillion, as companies shrug off OCCRP worries.
• The Group’s stocks have added nearly Rs 5 trillion in market value since March, after Hindenburg’s report shaved off over Rs 8 trillion in market cap.
• Stock prices of Adani Group’s listed companies have stabilised over the last six months after GQG Partners picked up stakes worth over $4 billion in five Adani Group companies.
  

They say there’s no such thing as bad publicity. The Hindenburg report may have shaved off $100 bn from the group’s market capitalisation back in January, but the recent report released by the Organized Crime and Corruption Reporting Project has not dented the Adani Group’s listed companies. The Group’s total market capitalisation has gone past the Rs 11 trillion mark on Friday. The company says that “this is underpinned by consistent value buying from both domestic and international investors.”

The conglomerate, with interests ranging from ports to power, added Rs 7,039 crore to its market cap on Friday, bringing the total market value of its 10 listed companies to Rs 11.02 trillion, up from Rs 10.96 trillion on Thursday. The Group’s stocks have also recovered their Hindenburg lows adding nearly Rs 5 trillion in market cap since early March 2023.

Of course what has helped the group is its ability to raise more equity capital and to retain the rating on their listed bonds despite all the bad press surrounding the group. The group has doubled down on fundraising efforts and project execution after the Hindenburg Report raised a series of questions on its debt.

Power is expected to be a major theme in the coming years as India’s demand for energy increases significantly on the back of strong domestic economic growth. The Group expects this trend to translate into bullish sentiment over the coming months for Adani Group stocks. Shares of Adani Power were in the limelight as they rose 2.88% on September 8 to hit a 10-month high of Rs 369.15, and surpassed levels as on November 11, 2022.

Four other Adani group companies posted gains on Friday including Adani Enterprises, Adani Ports and SEZ, and Adani Wilmar. Adani Ports and SEZ saw 1.86% rise in its stock price, pushing its marketcap to over Rs 1.78 trillion mark. Adani Enterprises, the group’s flagship company, rose 0.39% on Friday to close at Rs 2519.30, while its valuation crossed the Rs 2.87 trillion mark.

On January 24, 2023, Hindenburg Research released its report 'How The World’s 3rd Richest Man Is Pulling The Largest Con In Corporate History'. It alleged that the group has undertaken questionable practices – asking 88 questions on the group’s source of funds, offshore entities and more. It also said it has taken short positions on the group’s stocks.Stocks of all the nine companies of the group went into a freefall after the report was released — losing as much as ₹1 lakh crore in market value.

Adani group on 6 June said that it made full prepayment of margin-linked share backed financing totalling $2.15 billion before 12 March, well in advance of the 31st March 2023 timeline. The promoters also prepaid $700 million debt taken for the Ambuja Cement acquisition.

Stock prices of Adani Group’s listed companies have stabilised over the last six months after GQG Partners picked up stakes worth over $4 billion in five Adani Group companies. The first-quarter financial performance of Adani’s listed firms have also grown operating income at a healthy clip in Q1FY24.

The EBITDA (earnings before income tax, depreciation and amortisation) of Adani’s listed portfolio in Q1 grew by 42% Y-o-Y to Rs 23,532 cr. The core infrastructure EBITDA registered a growth of 34% Y-o-Y to Rs 20,233 cr, which accounts for 86% of the Adani portfolio. The group is aiming for an EBITDA of over Rs Rs 90,000 crore in the next 2-3 years.