The Adani Group dominated Tuesday’s (5^th Dec’23) stock market gains, accounting for over 65% of the total gains made by its ten listed companies. The spike also nearly reversed the losses on the ten stocks since the shocking Hindenburg report Adani in January. Investors in Adani Group companies noticed their wealth increase by ₹1.9 trillion on a day when the market saw gains of ₹2.9 trillion, the largest one-day increase in the infrastructure conglomerate’s value.

Even as the Group’s market capitalization approached ₹14 trillion, three Adani companies experienced a 20% surge in order to reach their upper circuit limits. Adani Total Gas Ltd., Adani Green Energy Ltd., and Adani Energy Solutions Ltd. were locked at ₹878.70, ₹1,084.40, and ₹1,348.50, respectively, their upper limits. Adani stocks have added ₹8.79 trillion to investor wealth in just two trading sessions.

Adani Group in A Favourable Position

After Hindenburg report Adani on January 24 severely criticized its stocks, the Gautam Adani-led infrastructure conglomerate temporarily became capex-cautious. The Group, raised $1.36 billion on Tuesday from a group of eight foreign lenders for its renewables division, Adani Green Energy, which is preparing a 45 GW project through a mega-project in Khavda, Gujarat. Adani borrowed $3.5 billion just six weeks prior to refinancing its acquisitions of Ambuja Cements Ltd. and ACC Ltd., two cement companies. Recent events in the Adani Group’s favour led to a strategy shift for the Group.

The Supreme Court stated on November 24 that the information mentioned in Hindenburg report Adani is neither “credible” nor “true state of affairs,” but it reserved its final decision. Since then, Adani shares have increased. Recent events in the Adani Group’s favour led to a strategy shift for the Group.

GQG Partners’ Trust in Adani Group

The US-based boutique asset manager GQG Partners Llc, led by Rajiv Jain, entered the Adani group on March 2 at a historic low and has since become the largest beneficiary of Adani’s most recent expansion. Since March, GQG Partners has invested at least ₹37,440 crore in five Adani group companies; the most recent bulk purchase, for ₹8,811 crore, was made in Adani Power on August 16. The value of GQG Partners’ stake in Adani Group as of Tuesday was ₹64,648.74 crore.

At ₹16,850.13 crore, GQG owns 4.96% of Adani Enterprises; at ₹13,499.95 crore, 6.32% of Adani Green Energy; at ₹6,592.5 crore, 5.45% of Adani Energy Solutions; at ₹11,042 crore, 5.03% of Adani Ports; and at ₹16,664.7 crore, 8.1% of Adani Power.

The head of a major foreign investment bank stated, under condition of anonymity, that “indicators of no-change-in-government prior to assembly polls are typically considered to be positive for any corporate group, since changes in the ruling party often force companies to alter business strategies, especially those engaged in infrastructure, ports, and construction-oriented businesses.”

DFC (Development Finance Corp.) Calls Hindenburg Accusations Irrelevant

After conducting a due diligence investigation into the Adani Group, the US International Development Finance Corp. (or DFC) was satisfied that the accusations in the Hindenburg report Adani, which accused the Group of pulling off “the largest con in corporate history,” didn’t apply to Adani Ports & Special Economic Zone Ltd., which recently received funding commitment for a project in Sri Lanka, according to a Bloomberg report on Tuesday.

After approving a loan to the conglomerate, a US government official was reported to have dismissed the Hindenburg allegations. The Adani Group stocks will continue to rise due to their exposure to the port and gas industries as well as the flagship AEL. This could eventually cause the market cap to reach pre-Hindenburg levels.

Adani Enterprises Ltd., the Group’s flagship, increased 17.38%, bringing new investor wealth of ₹48,809 crore. Adani Wilmar gained 9.99%, ACC 8.15%, Ambuja Cements 6.94%, Adani Power 15.33%, Adani Ports and Special Economic Zone 14.95%, and NDTV 18.11%.

Conclusion

To sum up, the Group is seeing a notable comeback following its severe setback earlier in the year due to the Hindenburg report Adani. A positive shift in sentiment towards the Group has been attributed to a number of recent developments, including the Supreme Court’s remarks, investments from GQG Partners, and the DFC’s dismissal of Hindenburg’s accusations. The Adani Group is well-positioned for future expansion and recovery due to its significant presence in industries like ports and gas and the successful operations of its flagship business, Adani Enterprises. Adani’s future appears bright as investor confidence increases and the market capitalization rises back to pre-Hindenburg levels.