Following the publication of a report by American short seller Hindenburg Research, shares of Adani Enterprises have drastically reversed losses and gained close to 30% in just two trading days.
In intraday trade on Tuesday, shares of Adani Enterprises increased by as much as 15%. The market capitalization of the entire Adani Group significantly increased as a result of the high increases in other Adani Group firms. The market value of the Adani Group has surpassed Rs 7.50 lakh billion.
It should be noted that since Tuesday, the stock price of the Adani Group has increased, with its flagship business Adani Enterprises taking the lead. At about 2:25 p.m., Adani Total Gas was trading above 3% while Adani Ports was up at 1.70 percent.
Adani Power, Adani Transmission, Adani Wilmar, and Adani Green Energy were confined to their upper circuit of 5%. Ambuja Cement, which is controlled by Adani, and ACC were also trading 2-4% higher, while NDTV was also restrained at its 5% upper circuit.
Powerful rally by Adani Group
The fixed-income roadshow that Adani Group organised in Singapore and Hong Kong to increase investor confidence appears to have been a major factor in driving up the prices of listed firms’ equities.
Adani Group has secured a definite commitment for a $800 million loan facility, which would be used to repay Adani Green Energy’s $750 million 4.375 percent bond due in September 2024. This allegation sparked a new rally. Two fixed income investors who attended the roadshow and confirmed this to the media.
Not only that. Another Reuters article claims that the Adani Group has informed creditors that it has obtained a $3 billion loan from a sovereign wealth fund, citing two sources.
According to the sources, one of the highlights of the three-day investor roadshow that ended today was a note distributed to participants that suggested the sovereign wealth fund’s credit line could be increased to $5 billion. The group did not, however, reveal the name of the sovereign wealth fund.
Also read: Rakesh Jhunjhunwala will Receive a Padma Shri
The Adani Group has not yet issued an official statement regarding the situation.
A day after the Adani management informed bondholders that it intended to repay or payback share-backed loans totaling $690 million to $790 million by the end of this month, the company announced a new fundraising strategy.
At the fixed-income roadshow, these strategies were discussed with investors and other participants. The strong comeback surge since Tuesday suggests that the group’s emphasis on debt reduction has at least temporarily comforted investors.
Although the rise has helped the listed companies of the Adani Group restore some market value, they still have a long way to go.
As of January 24, the day Hindenburg released its report alleging the Adani Group of stock manipulation and inappropriate use of tax havens, the combined market value of the ten listed Adani Group firms is still more than Rs 11 lakh crore less than the Rs 19.2 lakh crore. Concerns about the group’s listed firms’ significant debt were also expressed by the US short seller.
All of the accusations have been refuted, and Adani Group is still actively pursuing its plan to cut debt and win back investor confidence.