7 Adani stocks extend fall; group m-cap down Rs 5.5 lakh crore in 3 days
Most of Adani Group stocks continued to decline on Monday, wiping out around Rs 5.5 lakh crore from the group’s market capitalisation (m-cap) in three consecutive trading sessions. The stocks cracked after a report by US-based short seller Hindenburg Research alleged that the Indian conglomerate had engaged in stock manipulation and accounting fraud scheme over the last few decades.
Following Hindenburg’s claims, the combined m-cap of the Adani Group stocks tanked Rs 5.57 lakh crore to Rs 13.63 lakh crore from Rs 19.20 lakh crore on January 24 (closing price).
Adani Group stocks came under intense scrutiny after a report by US-based short seller Hindenburg Research alleged that the Indian conglomerate had engaged in stock manipulation and accounting fraud scheme over the last few decades. Adani Group, however, refuted the claim as baseless.
In an exclusive interview with Business Today, the group accused Hindenburg Research of not doing proper research and “copy-pasting” from the company disclosures.
“The response by Adani had a mixed effect on the stock group and market. The saga is likely to continue as a hanging risk in the minds of investors in the medium term. To expect a scientific assessment report either by a strong independent third party or government is dim in the short term. Now the focus of the market will be on Union Budget and US Federal Reserve policy,” said Vinod Nair, Head of Research at Geojit Financial Services.
All eyes would be on Adani Group, followed by Budget 2023 and until there’s some strength in the indices, it is advisable to stay light and maintain a stock-centric approach, said Osho Krishan, Senior Analyst – Technical & Derivative Research at Angel One.
On the stock-specific front, four (Adani Total Gas, Adani Wilmar, Adani Power, and NDTV) out of 10 listed Adani Group companies finally settled at their respective lower price bands on BSE today. (10 listed Adani stocks include recently acquired ACC, Ambuja Cements and NDTV.)
Adani Green Energy closed 19.99 per cent lower at Rs 1,187.70 over its previous close of Rs 1484.50, just a little above its lower circuit level of Rs 1,187.60. Also, Adani Transmission ended 14.91 per cent lower at Rs 1,710.10, slightly above its lower price band of Rs 1,607.80, touched in intraday deals. In addition, Adani Ports and Special Economic Zone fell 0.29 per cent today.
On the flip side, the group’s flagship Adani Enterprises, Ambuja Cements and ACC jumped up to 4.21 per cent.
Adani Group has said that timing of the Hindenburg report’s publication clearly showed the short seller’s intention to damage “the follow-on public offering from Adani Enterprises, which is the biggest FPO ever in India.”
Further, Adani Enterprises’ Rs 20,000-crore follow-on public offer (FPO) received bids for 13,98,516 shares on the second day of bidding (Day 2). The issue was subscribed just 3 per cent of the total size of 4,55,06,791 shares, as of 5 pm today.
The issue has received a tepid response so far amid a sharp fall in shares of Adani Group. However, Adani Enterprises’ stock rebounded today, but it is still trading below the FPO price band of Rs 3,112-3,276 per share.
Meanwhile, Indian equity benchmarks settled higher in highly volatile trade as gains in technology and consumer durables countered losses in energy and consumer goods stocks. The 30-share BSE Sensex pack rose 170 points or 0.29 per cent to close at 59,500; while the broader NSE Nifty index moved 45 points or 0.25 per cent up to finish at 17,648.
Bybusinesstoday
