Adani Enterprises shares crack 24% today; here's what analysts say

Shares of Adani Enterprises Ltd dwindled as much as 23.59 per cent in Thursday's trade to hit a day-low value of Rs 2,155. The stock was last seen trading 23.45 per cent lower at Rs 2,159. At this price, it has fallen 30.71 per cent in the past six months. Today's steep fall in the share price came after Adani Group's chair Gautam Adani was indicted in the US over bribery and fraud charges.

US authorities said Adani and seven other defendants, including his nephew Sagar Adani, agreed to pay bribes to Indian government officials to obtain contracts expected to yield $2 billion of profit over 20 years and develop India's largest solar power plant project.

Prosecutors said the Adanis and another executive at Adani Green Energy, former CEO Vneet Jaain, raised more than $3 billion in loans and bonds by hiding their corruption from lenders and investors. Gautam Adani, Sagar Adani and Jaain were charged with securities fraud, securities fraud conspiracy and wire fraud conspiracy, and the Adanis were also charged in a US Securities and Exchange Commission civil case.

In response, Adani Green said in a BSE filing, "The United States Department of Justice and the United States Securities and Exchange Commission have issued a criminal indictment and brought a civil complaint, respectively, in the United States District Court for the Eastern District of New York, against our Board members, Gautam Adani and Sagar Adani. The United States Department of Justice has also included our Board member, Vneet Jaain, in such criminal indictment. In light of these developments, our subsidiaries have presently decided not to proceed with the proposed USD-denominated bond offerings."

The fresh charges follow much turmoil for the Adani Group in January last year when US-based short seller Hindenburg Research accused it of using offshore tax havens improperly - a charge that the Indian conglomerate has denied.

On the stock-specific front, Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, "Adani Group shares are high-beta in nature. Investors should remain in 'wait-and-watch' mode, given the current heightened volatility. In terms of valuations, Adani Enterprises comes up with many incubating businesses which carry strong cashflows for the long term. With that being said, these stocks are suitable for investors with a high-risk appetite."

Technically, analysts largely suggested that the stock looked 'weak' in the near term. Support on the counter could be seen in the Rs 2,100-2,000 range.

Osho Krishan, Senior Research Analyst - Technical & Derivatives at Angel One, said, "The stock has experienced a sharp decline in just one day due to allegations involving the Adani Group chairperson. This significant drop is alarming as the stock has retraced to levels last observed in November 2023."

Ravi Singh, Senior Vice-President (Retail Research) at Religare Broking, said, "The stock looked weak on daily charts and can slip towards Rs 2,000 level in the near term. Immediate resistance will be at Rs 2,270."

Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi, said, "Support will be at Rs 2,100 and resistance at Rs 2,500. A decisive move above Rs 2,500 level may trigger a further upside towards Rs 2,600. The expected trading range will be between Rs 2,000 and Rs 2,500 for the short term."

Sebi-registered research analyst AR Ramachandran said, "Adani Enterprises is bearish but also oversold on daily charts with next support at Rs 2,064. Investors should buy only if a daily close is above the resistance level of Rs 2,540 for an upside target of Rs 2,817 in the near term."

As of September 2024, promoters held a 74.89 per cent stake in the Adani Group flagship entity.