The combined market capitalization of 10 listed Adani Group firms jumped nearly Rs 1.22 lakh crore on November 27. The recovery came after the conglomerate stated that there were no bribery charges against Gautam Adani and other group executives.
On Wednesday, the market capitalization of Adani Group companies increased to Rs 12.61 lakh crore from Rs 11.39 lakh crore on Tuesday.
“Gautam Adani, Sagar Adani, and Vneet Jaain have not been charged with any violation of the FCPA (Foreign Corrupt Practices Act) in the counts set forth in the indictment of the United States Department of Justice (DOJ) or the civil complaint of the US Securities and Exchange Commission (SEC),” Adani Green Energy Ltd (AGEL) informed stock exchanges.
With a rally of 19.76%, Adani Total Gas surged the most. It was followed by Adani Power (up 19.66%), Adani Enterprises (up 11.56%), Adani Energy Solutions (up 10%), and Adani Green Energy (up 10%). NDTV, Adani Wilmar, Adani Ports, Ambuja Cements, and ACC also gained between 4% and 10%.
The rally came despite global rating agency Moody’s on Tuesday downgrading its outlook for seven Adani Group entities, including Adani Green Energy, Adani Ports, and Adani Transmission, from “stable” to “negative.”
Sharing his views on Adani stocks, Jashan Arora, Whole-Time Director and Promoter of Master Trust Group, said, “Whenever a rating agency downgrades a stock, investors may become concerned. Adani Group stocks have been more volatile, particularly due to regulatory scrutiny and investor sentiment.
“The forecast for the foreseeable future is still unclear. Before making any investment decisions, investors are encouraged to keep a careful eye on court cases and assess the group’s financial standing. Think about your risk tolerance if you plan to stay in the short term. It might be appropriate to minimize exposure or to book losses if the downgrade has drastically affected your risk-reward ratio. Long-term prospects for the company remain strong, therefore it could be worthwhile to invest in this downturn. Make sure, though, that this fits your risk tolerance and investment approach,” Arora added.
On the other hand, Rajiv Jain’s GQG Partners said on Monday that the fundamentals of Gautam Adani-led companies they invested in remain sound, and there is no change in their investment thesis.
The statement from a major foreign investor in Adani Group companies came after Indian billionaire Gautam Adani was charged in the US with $250 million in bribery.
The day before the indictment (November 19), GQG had a total exposure to Adani Group companies of $9.7 billion on a total asset base of $158.6 billion, representing roughly 6.1% of total assets.