The Adani group of stocks went up for the third day in a row on Tuesday, after the Supreme Court-appointed AM Sapre committee said it was not possible to say that there was a regulatory failure in the Hindenburg case. With a rise of 39%, Adani Enterprises (AEL) was the company that did the best on the list. The company’s shares rose from Rs 1,888.05 on May 18 to Rs 2,632.25 on May 23.
The Adani group’s most important business is AEL. Its model is to use the cash flow from well-established companies to help new, promising businesses grow. In the past, the company has split off businesses like ports, power, transmission, city gas, solar generation, and edible oils to make more money for stakeholders. Over the next 10 years, businesses are likely to put more money into airports, green hydrogen, data hubs, and roads. These are expected to be the next growth drivers for businesses.
Adani Wilmar shares went up 29%, Adani Power shares went up 16%, Adani Transmission shares went up 15%, and Adani Green Energy shares went up 15%.
During the current rise in the group stocks, Adani Total Gas, Adani Ports and Special Economic Zone, NDTV, Ambuja Cements, and ACC all gained between 5% and 14%. The value of all Adani companies on the stock market rose from Rs 9 lakh crore on May 18 to Rs 10.79 lakh crore on Tuesday.
Rajiv Jain, the chairman and chief investment officer of GQG Partners, said on Tuesday that the small US investment company has increased its stake in the Adani group by 10%. This means that GQG Partners now owns a total of $3.5 billion worth of shares in the conglomerate.
In an interview with Bloomberg, the veteran investor revealed the news. He also said that GQG will help the conglomerate raise money in the future because he is still optimistic about what he calls “the best infrastructure assets available in India.”
What Adani stock should you buy now?
Different people have different thoughts about the group stocks. Two Adani Group stocks, Adani Transmission and Adani Ports, have ‘Buy’ grades from the global brokerage Jefferies. It said that Adani Transmission could be a big winner from the Distribution Amendment Act if it passes. The firm also said that double-digit growth for Adani ports should continue over the next few years as the company tries to do the same thing at its new ports that it did at Mundra.
Jefferies said that Adani Ports is India’s biggest port operator by volume and has a 22% market share, making it the market leader. It said that the company’s management wants to use its strong balance sheet to take advantage of the gradual output recovery that will happen as global container rates go down. Jefferies said in a note that the company also wants to grow in logistics and storage so that it can offer customers full-service options.
Vinit Bolinjkar, the head of research at Ventura Securities, said that the market watchdog Sebi’s clear signal that there is no corporate misgovernance is clear evidence. Shares of the conglomerate fell in the past because of things outside of the company. The business has nothing to do with it. Stocks in the Adani Group should now climb the walls of fear. Also, the pressure has been made less strong.
“We’re going to see a lot of institutional buyers come in and buy these stocks now that the clouds of uncertainty have lifted. At the same time, prices are good as well. They can get money to help them grow. The group is now stronger than before. Adani Total Gas and Adani Ports are not worth nearly as much as they are worth because they have strong businesses that bring in cash. Adani Enterprises has made asset sharing a top priority. When they go public, the green energy business will be able to fly. That is not taken into account in assessments. “I won’t be surprised if analysts give Adani Enterprises a target of Rs 4,000,” Bolinjkar said.
VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said that Adani stocks went up after the Supreme Court expert panel said, “At this stage, taking into account the explanations given by Sebi and supported by empirical data, prima facie, it would not be possible for the committee to conclude that there has been a regulatory failure around the allegation of price manipulation.”
“The high integrity of the panellists must have made buyers feel safe enough to buy the stocks that had been beaten down. Some short covering would have helped the rise as well. From a valuation standpoint Adani stocks are not undervalued,” Vijayakumar said.
Abhishek Basumallick, the Chief Equity Advisor at Intelsense Capital, said, “The news has slowly started to get better after being very bad since January. Things seem to have reached a bottom.” In the past few weeks, the latest SC news gave the stock a boost. Putting a price on something is still a little hard. Businesses will keep on doing what they were doing before. Right now, I’m just keeping an eye on Adani Ports and Adani Wilmar from the sides. I have no plans to buy or sell at this time.”