Adani Group stocks fall up to 18.5% amid tighter election race; market cap drops ₹1.35 lakh crore

Adani Group stocks crashed sharply on Tuesday after most of the group stocks hit 52-week highs in the previous session following the overall weak sentiment of the Indian markets after early trends showed that the election result could be tighter than exit polls had predicted. The decline in Adani Group stocks today erased the gains made in the previous session.

In intra-day deals, Adani Total Gas tanked the most, down 18.5 percent to below ₹1,000 to its day's low of ₹912.05. It was followed by Adani Green Energy, which cracked 18.3 percent to ₹1,664.95. Moreover, Adani Energy Solutions shed 14.2 percent to ₹1048.70 whereas Adani Power declined as much as 13.6 percent to ₹756.

Furthermore, Adani Enterprises, Adani Ports and Adani Wilmar also lost 10 percent each in intra-day deals. Adani Ports and Adani Wilmar declined as much as 9.8 percent each to ₹1428.90 and ₹322.20, respectively. Meanwhile, Adani Enterprises shed 10 percent to ₹3,280.85 after hitting a 52-week high in the previous session.

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Among other stocks NDTV fell 13 percent, Ambuja Cements contracted 9.9 percent and ACC lost 9.1 percent in intra-day deals.

The combined market capitalisation of all 10 listed Adani stocks also crashed by nearly ₹1.35 lakh crore, bringing the total market value of the conglomerate's listed entities to ₹18.07 crore as against ₹19.42 lakh crore in the previous session.

On Monday, in intra-day deals, the m-cap of all Adani Group firms crossed ₹20 lakh crore for the first time ever, higher than Adani Group firms' total m-cap of ₹19.20 lakh crore at close on January 24, 2023, when Hindenburg's report was made public. However, the feat was not continued in today's session.

Read here: Investors lose ₹20 lakh crore within first 20 mins of trade as election race gets tighter than what exit polls predicted

A recent Jefferies report maintained a bullish outlook on Adani Group firms, highlighting that the group has rebounded from the losses incurred during the Hindenburg episode and is now on an "expansion spree," with plans for a $90 billion capital expenditure over the next decade.

In January of the previous year, U.S. short-seller Hindenburg released a critical report on the Adani Group, alleging accounting fraud, stock price manipulation, and improper use of tax havens. The Adani Group has consistently denied all these allegations. Despite the denials, the stocks were significantly impacted as investor concerns grew.

During the financial year 2023–24, the Adani Group focused on reducing its debt and the founders' share pledge, according to the Jefferies report. The group's profit after tax (PAT) in FY24 jumped 55 percent to ₹30,768 crore.

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The report also highlighted that the group's net debt remained stable at ₹2.2 lakh crore in 2023–24, compared to ₹2.3 lakh crore the previous year.

Jefferies has given a 'buy' rating to three group stocks: Adani Enterprises (target price: ₹3,800), Adani Ports (target price: ₹1,640), and Adani Energy Solutions (target price: ₹1,365).

Adani Enterprises is scaling its manufacturing capacity towards starting green hydrogen production by 2026–27, and the Navi Mumbai Airport is expected to be commissioned by the fourth quarter of FY 2024–25. Adani Ports' performance has been boosted by the new dedicated freight corridor at Mundra, with significant logistics potential driving growth.

For Adani Energy Solutions, the brokerage highlighted strategic debt management, noting efforts to refinance debt at fixed rates aligned with the asset's life.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.