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The ports-to-power company Adani Group continued strengthening its position in the market on 1st September 2023 after seeing notable gains, especially in its energy portfolio. These gains resulted in the Group’s market capitalization of Rs. 12,675 crores. The ten listed Adani Group companies now have a combined market capitalization of Rs. 10.62 trillion, up from Rs. 10.49 trillion at the previous closure. The recent upswing in the Adani Group’s performance, particularly in its power portfolio, indicates the investing community’s restored faith in its potential.
With this accomplishment, the “Adani shares overleveraged” argument is disregarded. The interest results from the Group’s sound financials, strategic decision-making, and current performance.
The Group experienced significant gains on 1st September 2023, especially in its energy portfolio
Adani Group strengthened its market position after the Organized Crime and Corruption Reporting Project (OCCRP) incident. The Group had substantial gains on September 1, 2023, especially in its energy portfolio, which resulted in a ₹12,675 crore boost in market capitalization. As of August 31, 2023, the combined market capitalization of the Adani Group firms had increased to ₹10.62 lakh crore from ₹10.49 lakh crore.
Adani Power’s market capitalization climbed by 3% to ₹330, bringing it to ₹127,375 crores; in contrast, the market capitalizations of Adani Green Energy and Adani Energy Solutions increased by 2% to ₹149,960 crore and ₹92,017 crore, respectively. The flagship company of the conglomerate, Adani Enterprises, saw a 1% increase in share price to ₹2,450 and a ₹279,306 crore increase in market capitalization.
Adani Ports, Adani Transmission, and Ambuja Cements all saw a one per cent increase in share price, while NDTV saw a 0.40 per cent increase. And this gave rise to the Adani shares overleveraged controversy. The Group was accused by the OCCRP on August 31, 2023, of engaging in covert share trading with close associates of the promoter family.
Adani Group, however, disregarded the accusations and referred to them as “recycled allegations.”
The Adani Group’s power portfolio posted strong gains on renewed domestic investor interest
The port-to-power conglomerate Adani Group increased shareholder wealth by a staggering Rs. 47,050 crore as investors regained faith in the group’s stock portfolio. On September 11, 2023, the market capitalization of Adani Group surged to INR 11.5 trillion, a seven-month high. At the close of business on September 8, 2023, the group’s market capitalization was Rs. 11.02 trillion. The action was prompted by the promoters’ increased ownership of the two prominent businesses:
- Adani Ports and Special Economic Zone (APSEZ) and
- Adani Enterprises Limited (AEL), the flagship incubator
The market has interpreted this as a vote of confidence in the company’s prospects in the future. However, when promoter holdings are this high, it also indicates that the promoters’ interests are more in line with those of the shareholders and is a sign of the highest standards of governance. The promoter’s stake in AEL has increased to 71.93 per cent from 69.87 per cent. Similarly, the stake in APSEZ has increased from 63.06 per cent to 65.23 per cent.
The promoter’s purchases in the two businesses exceed Rs. 15,000 crore. These significant profits for the Adani Group show that the Adani shares overleveraged are merely a contentious issue.
Despite the shadow cast by recent media reports, the market is largely ignoring the negatives about the Adani shares overleveraged controversy
Even though the market largely ignores the negatives and focuses on the conglomerate’s potential for future growth, recent media reports cast doubt on Adani’s shares. But because of its adaptability and resilience, the Group has distinguished itself in these difficult times. Rekindled interest from domestic investors resulted in solid gains for the power portfolio of the Adani Group. Because the market is so focused on the conglomerate’s potential for future growth, it largely ignores the negative aspects of the Adani shares overleveraged controversy.
Adani stands out because of its ability to bounce back and adjust during trying times. Adani shares continue to be highly regarded by the market for several reasons:
- The company’s capacity to continue rating its listed bonds and raise additional equity capital
- A string of favourable events for the Adani Group, such as roadshows and a new round of foreign investment
- Recent talk of investments in several Adani Group companies
- Traders remain optimistic about the Indian market
Since early March 2023, the market value of Adani Group stocks has increased by nearly Rs. 5 trillion, recovering from their Hindenburg lows. Following a turbulent March quarter, the majority of Adani Group companies saw a recovery in the June quarter. Adani Power gained more than 30% during the quarter, and Adani Enterprises saw a net gain of more than 36%.
Conclusion
On September 1, 2023, the Adani Group improved its market position despite the OCCRP incident. Due to rekindled interest from domestic investors, the Group’s power portfolio saw significant gains. The market primarily concentrates on the conglomerate’s potential for future growth, disregarding the negatives of the Adani shares overleveraged controversy.
