Monday turned merrier for the Life Insurance Corporation of India (LIC), as a rally in Adani Group stocks added Rs 3,447 crore value to the portfolio of the insurance behemoth. Shares of Adani Group's listed firms rose up to 19 per cent on May 22 after the SC-appointed AM Sapre committee suggested it was not possible to conclude that there was a regulatory failure on the Hindenburg's price manipulation allegation. The Adani stocks also gained after a media report suggested that the group was considering monetisation of select real estate assets deemed non-core to its operations.
With a rally of 18.84 per cent, Adani Enterprises emerged as the top gainer. LIC held a 4.26 per cent stake in the company as of March 31, 2023. Adani Ports also gained 6.03 per cent in Monday’s trade. Data showed that the insurance major held a 9.12 per cent stake in the company in Q4FY23.
Adani Transmission, Adani Total Gas and Adani Green Energy also hit the upper circuit of 5 per cent each. Ambuja Cement and ACC also rallied 5 per cent and 4.93 per cent, respectively, on May 22. LIC also held over 1 per cent stake in the companies as of March 31, 2023. On the other hand, the benchmark BSE Sensex closed 234 points, or 0.38 per cent, higher at 61,963.68.
As a result, the market value of LIC’s holding in Adani stocks jumped to Rs 43,325.39 crore on May 22 from Rs 39,878.68 crore on May 19.
While sharing his views on Adani Group of shares, Vinit Bolinjkar, Head of Research at Ventura Securities said: “Sebi clearance clearly indicates that there is no corporate misgovernance. Earlier, shares of the conglomerate fell because of external factors. There’s nothing to do with the business. Adani group of stocks should climb the walls of worry now. The leverage has also been lightened.”
“We are going to see a huge number of institutional investors coming in buying these stocks because the clouds of uncertainty around stocks have been cleared. At the same time, valuations are also good. They have access to growth capital. The Group has emerged stronger. Adani Total Gas and Adani Ports are abysmally valued with strong businesses and cash flow businesses. Adani Enterprises has prioritised asset allocation. With their impending IPO, the green energy business will get wings. That is not discounted in valuations. I will not be surprised if analysts give a target of Rs 4,000 to Adani Enterprises,” Bolinjkar said in an interaction with Sakshi Batra of Business Today TV.
Jefferies has 'Buy' ratings on two Adani Group stocks namely Adani Transmission and Adani Ports & SEZ. Adani Transmission, it said, could be a key beneficiary of the Distribution Amendment Act if it comes through, the brokerage said adding that Medium-term double-digit growth for Adani ports should continue as it replicates the Mundra market share gain story at its acquired ports.
In the case of Adani Ports, Jefferies said the company is India’s largest port operator by volume with a dominant 22 per cent market share. It noted that the management is looking to leverage its strong balance sheet to benefit from gradual volume recovery, as global container rates ease. It is also looking to grow in logistics/warehousing to offer customers end-to-end solutions, Jefferies said in a note.