Adani group market cap jumps ₹42,000 crore on Wednesday in Adani Enterprises-led rally

• The rally in Adani group stocks continued on Wednesday, adding ₹42,116 crore in market capitalisation.
  
• The flagship Adani Enterprises led the rally once again, surging over 10% today and nearly doubling from its low of ₹1,017 on Monday.
  
• Six out of the nine Adani group company stocks were trading higher during the first half of Wednesday.
  
• Overall, the Adani group’s market cap is still down by ₹10.26 lakh crore since the Hindenburg report was released on January 24.
  

Adani group company stocks continued to rally on Wednesday, driving up the combined market capitalisation of the conglomerate by ₹42,116 crore as bond pre-payments by the group’s promoters shored up investor confidence in the group.

Adani group promoters Gautam Adani & family on Tuesday prepaid $1.1 billion (₹9,250 crore) of loans which were backed by share pledges.

The group’s flagship company, Adani Enterprises, once again led the rally, surging by over 10% in the first half of trade on Wednesday. It alone added ₹31,376 crore to the group’s cumulative market capitalisation.

Six out of the nine Adani group stocks were trading higher in the first half of trading on Wednesday.


Source: NSE, as of 12:30 p.m., February 8, 2023

On Tuesday, the nine Adani group companies saw an increase of ₹19,994 crore in their cumulative market capitalisation. Overall, the Adani group’s overall market cap is down by ₹10.26 lakh crore since the Hindenburg report was released on January 24.

RBI governor says Indian banks compliant with regulations on Adani group exposure

In a press conference following the Reserve Bank of India’s monetary policy meeting on Wednesday, RBI governor Shaktikanta Das said that Indian banks are in compliance with its regulations as far as exposure to the Adani group is concerned.

"The RBI has made its own assessments. The large exposure guidelines prescribed by the RBI are fully complied with by all the banks,” Das said.

"When banks lend money to a company or a group of companies, the banks do not lend on the basis of market capitalisation of that particular company," he added.

A year’s gains wiped out in a few days

A Business Insider India analysis found that the Adani group’s gains of 2022 have been completely wiped out since January 24. Gautam Adani’s net worth in this period fell by $61.4 billion, taking him from the third richest man in the world to 21st on the Bloomberg Billionaires Index.

Adani stocks’ steep fall on the bourses has also led to finance minister Nirmala Sitharaman issuing a statement to calm nervous investors, saying that insurance and banking companies are “not overexposed” to the group.

"Yes, there have been occasional blips in the market, maybe small or big, but they do address issues like that. And I strongly believe that our regulators are seized of this matter,” Sitharaman said in an interview.

Markets regulator Securities and Exchange Board of India (SEBI), too, stepped in and said it has measures in place to address excess volatility in the stock market. This includes Additional Surveillance Mechanism (ASM).

“This mechanism gets automatically triggered under certain conditions of price volatility in any stock,” SEBI said on Saturday.

Stock exchanges BSE and NSE have put three Adani group companies — Adani Enterprises, Adani Ports & SEZ, and Ambuja Cements — under their short-term ASM. It means that intra-day trading would require a 100% upfront margin and is aimed at curbing speculation and short-selling in these stocks.

Adani projects under pressure

The report from the US short seller has had wide repercussions. It saw Adani Enterprises calling off its ₹20,000 crore follow-on public offer. It also has reportedly pulled off its planned ₹1,000 crore bonds issue.

Multiple projects of the Adani group have also come under scrutiny in the aftermath of the Hindenburg fallout.

According to reports, the group’s ₹23,000 crore Dharavi Redevelopment project, the ₹16,700 crore Navi Mumbai International Airport project, and the Navi Mumbai power distribution license are all under the scanner.

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