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Adani group shares rally after $113 billion market wipeout


Adani group shares surged on Tuesday, a day after it moved to prepay some loans, in a relief rally for the Indian conglomerate that lost more than $113 billion in market value in two weeks since a U.S. short-seller’s critical report was published.

The group, led by billionaire Gautam Adani, said on Monday it is pre-paying $1.11 billion of loans on shares ahead of their maturity in 2024 due to recent market volatility. Separately, JPMorgan said the group companies were still eligible for inclusion in the bank’s bond indexes.

Those two factors were having a positive impact on stocks, said Anita Gandhi, director at Arihant Capital Markets.

“Also aiding the rise is the sharp correction in the group stocks, which have made them attractive,” she said.

Indian bourse National Stock Exchange of India (NSE) revised on Monday the maximum daily permissible limit for price moves for Adani Green Energy Ltd (ADNA.NS) and Adani Transmission Ltd (ADAI.NS) to 5% from 10%, according to data on its website.

The group’s flagship company, Adani Enterprises Ltd (ADEL.NS), jumped 20% on Tuesday morning, while Adani Ports and Special Economic Zone (APSE.NS) gained 8.9%.

Shares of Adani Green Energy (ADNA.NS) rose 2.7%, and Adani Transmission and Adani Wilmar (ADAW.NS) added 5% each. Adani Total Gas Ltd (ADAG.NS), however, fell 5% and Adani Power (ADAN.NS) shed 3%.

Many Adani group companies are reporting quarterly results this week, with Adani Ports and Adani Green set to report later in the day.

Though the stocks were staging a recovery, the cumulative losses of Adani group’s seven listed companies still stand at $105 billion since Hindenburg Research’s report on Jan. 24 that alleged it engaged in stock manipulation and use of tax havens. It also said the group had unsustainable debt.

Adani group has denied the allegations, saying it complies with all laws and has made necessary disclosures over time.

Adani has a total notional value of $7.7 billion in the JPMorgan’s CEMBI and JACI indexes, the bank said in a note on Monday.

Besides CEMBI and JACI, Adani’s dollar bonds remain eligible to be part of JPMorgan’s ESG Global Corporate Index (JESG), an integrated environmental, social, and governance corporate benchmark covering investment grade and high-yield markets.

The Adani crisis spilled over to the streets on Monday, with hundreds of members of India’s main opposition Congress party protesting and pressing for a probe into Hindenburg’s allegations.

Related Galleries:

The logo of the Adani Group is seen on the facade of one of its buildings on the outskirts of Ahmedabad, India, April 13, 2021. REUTERS/Amit Dave

An activist of the youth wing of India’s main opposition Congress party holds a placard featuring Gautam Adani, chairman of Adani Group, during a protest against what they say are investments by Life Insurance Corporation (LIC) and State Bank of India (SBI) in Adani Group, in New Delhi, India, February 6, 2023. REUTERS/Adnan Abidi