Bengaluru/Mumbai: Traders and investors expected a rally in Adani group shares on Wednesday in anticipation of a favourable verdict from the Supreme Court. The apex court did not disappoint.
A three-judge bench said there was no ground to doubt the investigation of the Securities and Exchange Board of India (Sebi) and did not see merit in letting another agency probe the matter. It also allowed the regulator three months to complete the ongoing investigation into US short seller Hindenburg Research’s allegations against the group last year.
“Truth has prevailed. Satyameva jayate,” Gautam Adani posted on X, welcoming the court ruling and thanking everyone who stood by the group.
The rally in the shares of the group’s listed companies extended further, with group-level market value more than doubling to ₹15.1 trillion from a low of ₹6.81 trillion in the weeks after the Hindenburg report nearly a year ago. However, the overseas listed bonds traded a tad lower.
Alongside, founder Gautam Adani rose up the ranks of the wealthy. Gautam Adani was estimated to be worth $119 billion before Hindenburg’s damning allegations on 24 January 2023. By 27 February, Adani’s wealth, on account of his holdings in the 10 listed entities, had dropped to $37.8 billion, according to Mint research. By Wednesday, Adani was estimated to be $86 billion, marking it a roller-coaster year for the tycoon.
However, the investor reaction on Wednesday was a culmination of things the Ahmedabad-based conglomerate had undertaken through the course of a turbulent year. The various events of last year have been dubbed a “distraction” by the Adani group, including most recently in the third week of December when a dozen-odd senior executives led by group chief financial officer Jugeshinder Singh and the youngest Adani scion, Jeet, met with a group of 200 people, including fund managers, analysts and self-styled investors, in Pune.
“There is an immense wealth creation opportunity out there (in Adani group),” Jeet had said, as he outlined the story of the conglomerate’s business steeped in energy, ports, airports and roads, and counts 320 million Indians as its users.
That is roughly one in every four Indians.
“It has been a systemic programme that has been going on for at least the last four years. To be honest, I didn’t even know that until I saw the half-yearly numbers that came out. I was shocked to see that when compared to last year; we have already surpassed the entire full-year Ebitda in the first half,” said Jeet.
The listed businesses of the Adani group recorded earnings before interest, tax, depreciation and amortization (Ebitda) of ₹71,253 crore in the April-September period of the current financial year.
“That is the demonstration of everything that has happened this year, every distraction that has happened. We have just kept our heads down and focused on one thing we are good at. And that is execution,” Jeet added.
Mint attended the presentation.
On Wednesday morning, shares of flagship Adani Enterprises jumped as much as 9% to hit ₹3,199, testing the ₹3,112-3,276 price band of its follow-on public offering (FPO) early last year, before closing at ₹3,003, up just 2.45%. Adani Enterprises was forced to pull back the ₹20,000 crore FPO last year after the Hindenburg report hammered its shares.
The other heavyweight Adani Ports, an index stock, rallied 6% to hit a 52-week high of ₹1,144 in anticipation of the petitions being dismissed. Post the ruling, the stock, however, gave up nearly all of its gains to end up just 1.5% at ₹1,094.2. The company informed the stock exchanges on Wednesday that its board has approved raising up to ₹5,000 crore by selling non-convertible debentures.
Other group stocks that rallied included Adani Total Gas, which hit the 10% upper circuit, before closing with slightly lower gains of 9.83% at ₹1,099.30, and Adani Green, which closed up 5.8% at ₹1,697.25.
However, the group’s dollar-denominated bonds traded marginally lower at 6pm India time, with the Adani Enterprises 11 July 2026 bond trading down 6 cents at $101.71 and the Adani Ports 27 May 2026 paper also trading 6 cents lower at $102.12.
Sudeep Bandyopadhyay, non-executive director, Inditrade Capital, said the lower overseas bond rates likely indicate that raising capital overseas could remain a challenge for the ports-to-renewable-energy group, despite the overhang of the Hindenburg report “decisively” lifting in the domestic market.
The ruling was cited as a big positive by another market veteran, Madhusudan Kela. “I am a buyer selectively of the group stocks, and I will add significantly if they decline on account of market volatility induced by global or domestic reasons,” Kela said.
“The niche which we have created for ourselves in a market where execution is tough, where you require a lot of collaboration across different stakeholders, be it the local communities, the government, customers and everything together, the ability to navigate that stakeholder relationship and create world asset, run a world-class asset and finance in a world-class manner, is something we are proud that no one else has been able to replicate,” Jeet told investors last month.
Over the last year, the Adani group has taken several steps to get its house in order and win back the confidence of investors. Promoters sold shares in both listed and privately held businesses, including a majority stake in Adani Capital and Adani Housing Finance to Bain Capital.
Adani got a big vote of confidence from Rajiv Jain’s GQG Partners, which invested close to $2.6 billion across six public companies of the group. Later in November, the group got a $550 million investment from International Development Finance, the finance arm of the US government, to build a port in Sri Lanka.
“There was a time when some of the numbers were concerning,” acknowledged Jeet, referring to the higher debt-to-Ebitda ratio. “But since then, systemically, we have brought it down from what used to be 5 times to 2.5 times”.
The Adani group has brought down its debt-to-Ebitda ratio to a manageable 2.5 times at the end of September 2023 from 3.3 times at the end of December 2022.
Significantly, the group appears to be exiting its non-infrastructure businesses. It is currently evaluating bids for its stake in its fast-moving consumer goods joint venture with Indonesia’s Wilmar Group.
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Aisha Patel is a dedicated Indian correspondent with a deep understanding of the nation’s diverse affairs. With a background in Indian culture, politics, and current events, she provides in-depth analysis and timely reporting on domestic issues within India.
