Adani Enterprises, forced to scrap an FPO in January last year, has managed to recover a significant portion of its losses but still trades 15 percent below the previous year’s price. Meanwhile, Adani Green Energy, New Delhi Television, and ACC show declines ranging from 5 to 12 percent.
Market Impact of Hindenburg Report
Exactly one year ago, Hindenburg Research released a damning report on the Adani Group, accusing it of various wrongdoings, including non-compliance with minimum public shareholding and non-disclosure of related party transactions. While seven out of the Group’s 10 stocks remain below levels seen a year ago, three, including Adani Ports, have surpassed pre-Hindenburg prices.
On January 24, 2023, Hindenburg’s report led to a sharp decline in the share prices of Adani’s listed entities, wiping out over Rs 12 lakh crore in market value within a month. Several stocks are still recovering from this shock.
Adani Total Gas has been the most significantly impacted, with its stock still trading down 74 percent from the year-ago level. Adani Energy Solutions and Adani Wilmar are the next two worst performers, down 62 percent and 39 percent, respectively.
Recovery Amidst Denials
Despite the denial of allegations by the Adani Group regarding non-compliance and manipulation, Adani Enterprises, which canceled an FPO in January last year, continues to trade 15 percent below last year’s price. Other affected stocks include Adani Green Energy, New Delhi Television, and ACC, showing declines of 5-12 percent. Ambuja Cement, however, has managed a 5 percent increase compared to last year.
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This trend persists even after the Group’s stocks regained strength following the Indian Supreme Court’s rejection of appeals for a federal probe or special investigation into Adani’s businesses or the Sri Lankan port it is constructing.
Mixed Performance and Notable Gainers
While most stocks are struggling to regain ground, three stocks have exceeded their year-ago levels. Adani Power has not only recovered losses but has surged by an impressive 89 percent, aligning with a broader rally in power stocks due to anticipated increases in India’s power consumption. Adani Ports and Special Economic Zone is another significant gainer, boasting a 50 percent increase from last year’s level.
Despite the controversies, notable investors, including QIA and Total, have shown confidence in Adani Group companies. QIA invested $474 million in Adani Green Energy in August last year, while Total injected $300 million in Adani Green in September. Additionally, the International Development Finance Corp scrutinized Hindenburg’s allegations before approving half-a-billion-dollar funding for an Adani port terminal in Sri Lanka.