The stocks of companies under the Gautam Adani-led group soared on Tuesday as investor confidence was bolstered by a media report stating that the US government did not find short-seller Hindenburg Research’s allegations of corporate fraud against the conglomerate relevant before extending a $553 million loan for a container terminal in Sri Lanka. Another key trigger was Adani Green Energy securing a $1.36 billion loan from a consortium of eight international banks.
The group’s 11 listed stocks saw gains ranging from 7 per cent to 20 per cent, resulting in a record addition of Rs 1.93 trillion to the market cap. The group’s market value reached nearly Rs 14 trillion, the highest since January 31.
Allegations in a scathing report by Hindenburg Research on January 24 — which erased around Rs 13 trillion from the Adani group’s market value earlier this year — were front and centre as the International Development Finance Corporation, or DFC, conducted a due diligence investigation of the conglomerate, an official from the US agency told Bloomberg. The official further said that the DFC was satisfied that the allegations weren’t applicable to Adani Ports & Special Economic Zone, which is spearheading the Sri Lankan project.
Shares of Adani Ports rose 15 per cent to Rs 1,012 apiece during the day. The stock is already 33 per cent higher than levels seen before the Hindenburg report.
The sell-off in Adani stocks troughed by the end of February, ahead of a Rs 15,500 crore share purchase by US-based investment firm GQG Partners from Adani group promoters. GQG, led by Rajiv Jain, has acquired stakes in five Adani group firms for about $4.2 billion – the value of which has now increased by over 75 per cent to nearly $7.5 billion.
From a low of Rs 6.8 trillion, the Adani group’s market cap has more than doubled but is still Rs 5.3 trillion below the January 24 levels.
The majority of the recovery in market value has occurred in the past week. Last week, the Adani group’s market cap surged by Rs 1 trillion after the Supreme Court concluded hearings in a regulatory probe investigating the American short seller’s allegations. While reserving its order on the probe, the apex court stated it would not take media reports on the conglomerate as the “gospel truth”. On Monday, the value of the 11 listed stocks had increased by Rs 73,000 crore, a day after the Bharatiya Janata Party (BJP) swept polls in three states.
First Published: Dec 05 2023 | 8:20 PM IST