Adani Total Gas, Adani Green, Adani Transmission: Meet the worst BSE performers since January 24

Even as the rout in Adani stocks continues on Dalal Street, shares of three group companies--Adani Total Gas, Adani Green Energy and Adani Transmission--emerged as the top loser since January 24, when the US short-seller Hindenburg Research had alleged various kinds of fraud and accounts manipulations by Adani Group companies over the years.

With a fall of 78.5 per cent, Adani Total Gas declined the most in the 21 trading session. The scrip retreated to Rs 834.95 on February 22 from 3885.45 on January 24, 2023. Adani Green Energy and Adani Transmission also tanked 71.8 per cent and 71.4 per cent, respectively, during the same period. Meanwhile, the benchmark equity index BSE Sensex tanked 1233.77 points to 59,744.98 on February 22, 2023.

Sharing his views on the Adani group of companies, Nirav Karkera, Head of Research, Fisdom said, “Investors must be highly cautious as the jury is still out on the degree of truth to allegations and in case proven true, the estimate of further damage that the verdict could cause existing shareholders. However, if the group manages to regain investor interest on merit, Adani Ports, Adani Wilmar and Ambuja Cements stand to gain as fundamentally strong companies.” Shares of Adani Ports, Adani Wilmar and Ambuja Cements have also lost 23.30 per cent, 28.30 per cent and 29.20 per cent, respectively, since January 24, 2023.

Coming to other major losers on the BSE, shares of Eureka Industries, Sarvottam Finvest, PC Jeweller, Adcon Capital Services, Apoorva Leasing Finance and Investment Company, Mega Nirman & Industries, Adani Enterprises and West Leisure Resorts also declined somewhere between 58 per cent and 64 per cent during the same period.

On the other hand, the rest of the companies from the Adani group including ACC, NDTV and Adani Power also slipped 24.9 per cent, 28.90 per cent and 40.80 per cent amid the ongoing fall in the group companies since January 24.

Gaurav Dua, Sharekhan said, “We have been asking our clients largely to stay away from Adani group because there is a lot of news flow which is not good. For risk-takers, we are suggesting Ambuja Cements and Adani Ports. Both of these companies have good businesses and balance sheets. Cash flows are also there in these companies. Lastly, the share price of these companies are also looking attractive now.”

On asking will Adani Enterprises and Adani Ports and Special Economic Zone will be out from the Nifty 50 index in the next review meeting, Dua added that exchanges have structure and it is not done on a random basis. “It is based on market cap, volumes and float available in the market. I don’t think exchanges will go out of the way to do some of the changes which are not in line with approved practice,” the market watcher said.

Overall, the combined market capitalisation of the 10-listed Adani group companies have plunged by Rs 11.62 lakh crore to Rs 7.58 lakh crore on February 22, 2023 from around Rs 19.20 lakh crore on January 24, 2023.

On the other hand, players like Aveer Foods, Soma Textiles & Industries, Nettlinx, Paragon Finance, Taylormade Renewables, Titan Intech, Softrak Venture Investment, Integrated Technologies, Jhaveri Credits & Capital and Classic Filaments have gained somewhere between 75 per cent and 150 per cent since January 24.

Sanjay Bembalkar, Co-Head of Equity at Union Asset Management Company said, “The market may be volatile in the short term. However, we are positive about India’s structural growth story. Our government is keen to make India a global manufacturing hub and is making deliberate efforts to stimulate manufacturing activity within the nation. India’s private consumption is on a structural growth path. In fact, as per International Monetary Fund (IMF) data, India is one of the fastest-growing large economies. Hence, we find the risk-reward trade-off favourable for investors with a long-term horizon (beyond 3 years).”

“What interests us are the sectors dependent on local, controllable variables and that are relatively less exposed to the global risks like potential recession in the developed world. Financials is one such sector. We see many good quality lending companies that have seen a significant improvement in the balance sheet from the pandemic levels and are primed for growth. In a fast-growing economy like ours, they are likely to witness a favourable business cycle over the medium term,” Bembalkar said.

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