Thanks to a strong 12 per cent rally in Adani Enterprises Ltd shares in the past one month, the Adani group flagship has erased all losses it incurred due to the scathing report by Hindenburg Research on January 24, 2023. On Friday, Adani Enterprises climbed 1.91 per cent to hit a high of Rs 3,456.25, surpassing the Rs 3,442.75 level at which it closed at on January 24, 2023. With this, Adani Enterprises also briefly surpassed the Rs 3,92,473.89 crore market capitalisation (m-cap) level that it enjoyed pre-Hindenburg report.
The Hindenburg Research report had shaved $150 billion off Adani group's m-cap. It made several allegations including stock manipulation and accounting frauds at Adani group companies that sent Adani group shares tumbling. The group founder Gautam Adani, who was briefly worth $150 billion in September 2022, moved out of the top 20 billionaires, following the report. In fact, Adani's personal wealth plunged to a low of $37.7 billion on February 27, 2023.
Later, a committee was set up to probe the allegations. The Supreme Court rejected the Hindenburg report's heavy reliance on OCCPR report and third party organisation, saying such reports without any verification, could not be relied upon as a proof.
As things stand today, Gautam Adani is worth $109 billion and is the 13th richest person in the world. He is a few billions behind Mukesh Ambani, who is worth $114 billion, as per the Bloomberg Billionaire index.
The Adani group was also in news recently after an Financial Times (FT) article on the Adani group alleged that in 2013 the group imported low-quality coal and then sold that same coal to state-owned entities, but priced it as high-grade coal.
"FT article is just noise from a long time ago," said Cantor Fitzgerald, as it suggested a share price target of Rs 4,338 on Adani Enterprises. Cantor Fitzgerald said the market appeared to shrug off this report, "as we believe the market is inferring that this is an immaterial story, as do we." This brokerage suggested a price target of Rs 4,338 on Adani Enterprises.
From a top-down point of view, India is one of the fastest-growing economies and is heavily investing across a range of end-markets to support continued economic growth, which Cantor Fitzgerald said bodes well for Adani Enterprises, as it touches nearly every aspect of life in India.
"From a bottoms-up point of view, we believe Adani's valuation does not fully reflect what we believe the value of its current portfolio of established and incubating businesses to be. As these businesses continue to grow and mature, and as the demerging of businesses within Adani approaches, we believe this will result in shares more accurately reflecting what Adani's sum-of-the-parts valuation is," Cantor Fitzgerald said.
Adani Enterprises shares are up 38 per cent in the past one year.