Adani Gas, Adani Green, Adani Power, Adani Transmission and other group stocks tank up to 20%

Adani Group stocks continued to bleed during the early trade on Friday following the Hindenburg report. The short seller's latest report raised concerns over the Gautam Adani-led conglomerate's financial health as the stocks cracked up to 20 per cent during the early trading hours.

All the 10 listed Adani Group stocks were trading in deep red, intensifying the brutal sell-off in the broader markets. The sell-off has hit Gautam Adani hard as he slipped from the third to the fourth spot on the world's rich list, as per Bloomberg's Billionaire Index.

The elevated valuations of Adani stocks are a serious concern, said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Adani Total Gas plunged 20 per cent to Rs 2,947.05, just shy of its lower circuit level at Rs 2,934.55, before making a marginal recovery. The city gas distributor and supplier had settled at Rs 3,668.15 on Wednesday.

Adani Transmission tumbled 19 per cent to Rs 2,034.30 during the early trade. Other group stocks including Adani Power and Adani Wilmar were locked in the lower circuit limit of 5 per cent at Rs 248.05 and Rs 517.30 levels, respectively.

The blue-chip counters of Adani Group, Adani Ports and Special Economic Zone shed 5 per cent to Rs 675, whereas Adani Enterprises lost 6 per cent to Rs 3,389.95 during the trading session.

Adani Enterprises' Rs 20,000 crore follow-on public offering (FPO) began today. The company will be selling its shares in the range Rs 3,112-,3,276 with a lot size of four equity shares. The issue, which offers a discount of Rs 64 apiece to retailers, can be subscribed till January 31, 2023.

Hindenburg analysts have raised issues related to accounting frauds, stock manipulation and other corporate governance issues, in its latest reports. The short sellers saw an up to 85 per cent downside potential in the seven key listed companies of the group citing fundamental and sky-high valuations concerns.

Other three companies, including recently acquired Ambuja Cements and ACC, declined 6 per cent during the early trade, whereas New Delhi Television (NDTV) was locked in the lower circuit at Rs 263.20, losing another 5 per cent.

Commenting on Hindenburg's report, Deepak Shenoy, Founder and CEO at CapitalMind, said, "This is one long report. Some of it is wild, some of it is already known, and some of it requires you to go deeper. I can't comment on the truth of this yet - can't independently verify some of them - but it's going to be controversial."

CLSA in its latest note said share of bank funding in overall Adani group debt is less than 40 per cent and that bonds, financial institutions and foreign banks form a larger part of the group debt.

CLSA said bank funding to the group has not materially increased in the past few years, even as debt of top five Adani companies has increased from Rs 1 lakh crore to Rs 2 lakh crore over the past three to four years. 

 

Also read: Sensex below 60k, Nifty slips 100 pts; Adani Group stock tank up to 18%, TaMo rises 8%

Also read: Hindenburg impact: 10 Adani group stocks lose Rs 2.37 lakh cr in market value in 2 days