PremiumFor last 12 days Gautam Adani led Adani Group has been bearing the brunt of the US short seller Hindenburg Report's ‘expose’ on the group. Adani had to withdraw the Follow on Public Offer (FPO) to boost confidence but nothing that the company has done so far has brought any good news. Bad news is piling up during the earning season taking the company stocks to rock bottom.
Stock analyst Aswath Damodaran has put a stock value of ₹947 on it. Adani Transmission is expected to come out with results today, whereas, Adani Ports and Adani Green will declare results tomorrow. Adani Power is expected to come out with results on 8th February.
Opposition is also using Hindenburg Report against Gautam Adani as a fodder against the government. Parliament was adjourned last week due to disruptions on the topic and expected to continue.
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Senior Congress leader and Rajya Sabha MP Randeep Singh Surjewala on Monday attacked the Centre over the Hindenburg-Adani row, questioning the government's 'loud silence' on the issue.
"Why is the government avoiding a discussion on the Adani scam? Why are the Finance Minister and PM Modi not coming to the Parliament? Why was the country's wealth, LIC and SBI's money invested in Adani's sinking companies?" Surjewala said.
He also asked the government to explain why the valuations of the Life Insurance Corporation of India (LIC) and the State Bank of India (SBI) were 'falling'.
"Why did the investment value of the money that was invested in Adani's shares decrease by ₹30,000 crores? The country wants to know how the Amrit Kaal budget became the 'Mitra Kaal' budget to suit PM Modi's friend," he said alleged. (ANI)
Continued sell-off in Adani Group has now stated impacting not just India's stock markets, but also India's rankings in some key indices like the MSCI. Some news reports suggest that Adani-Hindenburg fiasco might also have an adverse impact on the overall sentiment among global investors. Watch how the Adani-Hindenburg row is impacting India.
Adani Transmission Ltd on Monday reported a 78% increase in its consolidated net profit for the quarter ended December to ₹474.72 crore, aided by a ₹240 core gain on account of a one-time income from a regulatory order.
National Stock Exchange of India (NSE) has revised the circuit limits of Adani Green Energy Ltd and Adani Transmission Ltd to 5%, according to data on its website on Monday.
The NSE had revised the price bands of both companies to 10% from 20% last week.
Stock exchanges set the circuit limits to prevent large movements in the price of stocks in a very short time. (Reuters)
India's largest life insurer, LIC holds a 4.23% stake in Adani's flagship company Adani Enterprises, while its shareholding is to the tune of 9.14% in Adani Ports and 5.96% in Adani Total Gas. Earlier, LIC said, the total amount invested in Adani firms amount to ₹36,474.78 crore. By end of December 2022, the insurer's exposure is ₹35,917.31 crore in Adani's equity and debt which is less than 1% of its total assets under management.
SBI earlier stated that their exposure in Adani firms comes to around ₹27,000 crore. SBI's chairman said the bank's loans to the conglomerate are 0.88% of its total.
Since the time US-based Hindenburg Research firm released its report on January 24, accusing Gautam Adani's group of tax evasion, fraud schemes, and stock manipulations among others, the Indian conglomerate's listed stocks have witnessed massive losses in valuation.
On Monday, the group's cumulative market losses topped $110 billion. As per Reuters, this sparks fears of wider financial contagion.
The crisis in Adani Group does not seem to calm down with hundreds of members of India's opposition parties taking it to the streets across India, demanding a probe into allegations raised by US-based short-seller Hindenburg against the conglomerate.
As per Reuters, opposition parties, who last week called for a parliamentary panel to investigate the saga and disrupted proceedings, have questioned Indian Prime Minister Narendra Modi's closeness with Adani.
On Monday, protesters expressed anger about investments made by two government-owned behemoths Life Insurance Corporation (LIC) and State Bank of India (SBI) in the Gautam Adani's group.
As per India’s sherpa to the Group of 20 nations, the crisis engulfing Gautam Adani’s indebted conglomerate shows the need for good governance and transparency, as per Bloomberg.
In an interview, Amitabh Kant said, "we should ensure we do projects in a manner where we don’t end up doing anything that leads to over-leveraging."
Adani Group's rout of 108 billion dollars alongside rate hike scenarios from central banks likely has slowed down the year's Emerging-Market rally.
According to a Bloomberg report, cracks are appearing in Wall Street’s bullish case for emerging markets as hurdles — from Adani Group’s $108 billion rout to the Federal Reserve’s rate-hiking plans — prompt a more selective investment approach.
As new risks arise, the report stated that "an early 2023 rally in developing-economy assets, fuelled by China’s reopening and hopes for looser global financing conditions, is already starting to lose some momentum."
Investors will continue to monitor Gautam Adani’s circumstances in the energy-to-ports empire.
The majority of Adani's listed stocks tumbled on Monday as troubled days at the conglomerate deepened.
Except for Adani Ports' share price, other stocks of the group dipped with most of them extending their lower circuits.
Following the selloff, Adani Group's combined market cap declined by ₹9.5 lakh crore on Monday.
The Maharashtra government has announced its Economic Advisory Council (EAC) panel which will include Karan Adani, the CEO of Adani Ports and SEZ. He is the son of Gautam Adani whose Group is battling against allegations from a US-based short-seller Hindenburg Research. However, Adanis have denied those allegations.
The Adani junior is entering the panel which has 21 members. Mukesh Ambani's son Anant Ambani is among them.
Tata Sons chairman N Chandrasekharan will head the panel.
Bank of Baroda open to lending to Gautam Adani-backed group going forward, provided that the conglomerate meets all of the bank's underwriting criteria.
Bloomberg reported that Adani Group has dropped Deloitte as the auditor of its various subsidiaries in the UK last year, replacing it with a far smaller accountancy firm.
As per the corporate filung, Crowe UK has replaced the Big Four firm as the auditor of UK entities including Adani Energy Holdings Ltd after the Indian firm bought them in 2021.
Adani Green Energy and Adani Ports stock will be in focus on Tuesday ahead of their December 2022 quarterly earnings scheduled on this day.
Adani Group-backed Adani Transmission garnered a net profit of ₹474.7 crore in Q3FY23, rising by 77.8% from ₹267 crore in the same quarter a year ago.
EBITDA also witnessed robust growth of 64% to ₹1,477.5 crore in Q3FY23 compared to ₹900.9 crore in Q3 of previous fiscal. Margins expanded to 41.6% in Q3FY23 versus 30.9% in Q3FY22.
Meanwhile, the company earned a revenue of ₹3,277.03 crore from generation, transmission and distribution business in Q3FY23 --- higher than ₹2,613.35 crore in Q3 of previous fiscal. However, revenue in trading business came in at ₹274.67 crore in Q3FY23 versus ₹298.35 crore in Q3FY22.
Overall, revenue rose by 22% to ₹3,551.7 crore in Q3FY23 versus ₹2,911.7 crore in the corresponding period of previous year.
Unlike other Adani shares, Adani Ports and Special Economic Zone (ASPEZ) witnessed massive buying sentiment. The stock climbed nearly 10% on BSE with an intraday high of ₹548.70 apiece during trading hours.
However, the stock closed near the day's high to ₹546.05 apiece up by ₹47.20 or 9.46% on BSE.
Investors were upbeat about Adani Ports after the company announced its operational performance for January 2023 last week.
As per the regulatory filing, in January 2023, the company handled MMT of total cargo, implying a YoY growth of 11%.
Between April 2022 to January 2023 of the current fiscal, the company recorded 280.5 MMT of cargo volumes, which is a good 8% YoY growth.
Some of the Adani stocks such as Adani Power and Adani Wilmar, Adani Green Energy, and Adani Total Gas have hit back-to-back lower circuits on exchanges.
Lower circuits in equity shares indicate that there are multiple sellers but no buyers. Lower circuit price levels are referred to as lowest tradable price of a particular stock.
Adani shares continued to bleed as feud between the group and US-based short-seller firm Hindenburg escalated.
Adani Enterprises stock dropped by nearly a percent. Adani Power and Adani Wilmar, Adani Green Energy, and Adani Total Gas extended their 5% lower circuits. While Adani Transmission ended at 10% lower circuits.
As per reports, All India Power Engineers Federation (AIPEF) stated that UP's Power Utility have cancelled Adani Group's bid to supply smart meters on February 4.
AIPEF highlighted that price of ₹10,000 per smart meter is higher than government-owned REC's standard bidding guideline. As per reports, All India Power Engineers Federation (AIPEF) stated that UP's Power Utility have cancelled Adani Group's bid to supply smart meters on February 4.
AIPEF highlighted that price of ₹10,000 per smart meter is higher than government-owned REC's standard bidding guideline.
Promoters to prepay $1,114 million ahead of its maturity of September 2024. With the repayment of such amount, the following Adani listed company shares will be released in due course:
1. 168.27 million shares representing 12% of the promoters in Adani Ports
2. 27.56 million shares, representing 3% of promoters holding in Adani Green Energy
3. 11.77 million shares, representing 1.4% of promoters holding in Adani Transmission
On the backdrop of recent market volatility, promoters of Adani have decided to prepay $1.114 billion ahead of its maturity of September 2024.
In a statement, it said, "in light of recent market volatility and in continuation of the promoters' commitment to reduce the overall promoter leverage backed by Adani listed companies shares, we are pleased to inform that promoters have posted the amounts to prepay $1,114 million ahead of its maturity of September 2024."
This is in continuation of promoters' assurance to prepay all share backed financing, it added.
On Opposition's protest over the Adani-Hindenburg row, RJD MP Amarendra Dhari Singh said, "Our reputation worldwide is deteriorating. There is a genuine reason for that. Hardly any company's shareholding, anywhere in the world, has gone by 2000%. So, I think no harm in Opposition's demand for JPC."
Adani Enterprises Ltd. yielded a value of 945 rupees per share even before “factoring any of the Hindenburg accusations of fraud and malfeasance," Aswath Damodaran of New York University wrote in a blog post on February 4.
“I still think the company is priced too high, given its fundamentals (cash flows, growth and risk)," he added. Read more
Opposition party kicked off planned protests at some state-run companies on Monday over the crisis at Adani group, whose seven listed firms saw another sell-off that drove their market loss to $112 billion in under two weeks.
At one of the protest sites in Mumbai, people held up banners with the words "Save SBI", television footage showed.
Both houses of the parliament were adjourned till 2 pm today amid loud protests and sloganeering from opposition parties demanding a discussion on and an investigation into allegations of fraud against the Adani Group.
The Securities and Exchange Board of India (SEBI) has written to various custodian banks asking for details on beneficial owners of offshore funds and foreign portfolio investors (FPIs), two sources directly aware of the matter said on Monday, Reuters reported.
Sebi, last week asked custodian banks - typically foreign banks that manage flows from FPIs- to reach out to these investors by March and share the details of their findings by end of September, the sources said, speaking on condition of anonymity as the matter is confidential.
Nifty around 17,700, Sensex falls 400 points
Avinash Gorakshkar, Head of Research at Profitmart Securities: “These stocks are expected to remain in base building mode for one to two quarters. So, my suggestion to new investors is to wait for the quarterly results and take any decision only when the stock comes out of current base building mode." Read more
After opposition parties staged a protest near the Gandhi statue in the Parliament complex over Adani issue, Congress president and Leader of Opposition in Rajya Sabha Mallikarjun Kharge told ANI, "We are ready to speak on President's address and we give it its due importance. But first priority is that Prime Minister Modi give a reply on the Adani issue."
Indian cricketer joined the online conversation over Gautam Adani calling tyhe Hindenburg Report a well planned conspiracy planned against Indian markets. He tweeted saying, "White people are jealous of India's progress. It's a hitjob on India's markets and looks like a well planned conspiracy. They can try hard, but as always, India will emerge stronger.'
'We want a Joint Parliamentary Committee probe into Adani issue & Central govt is also not ready to have discussion on Adani issue. Govt wants to hide everything & they’re now being exposed,' KC Venugopal, Congress MP
After suspension notices issued by opposition over Adani crisis were rejected in both the houses, after ruckus sessions were halted. Speaking to reports P Chidambaram said, “We don't want to disrupt the House. We want a discussion on a matter of grave public importance. Govt must facilitate a discussion."
Opposition raised the issue of Hindenburg report against Adani in both houses of Parliament, leading to ruckus and adjournment.
The Adani group’s pursuit to dominate Indian infrastructure, especially airports, through aggressive expansion may face turbulence with the current meltdown in valuation and credibility, industry executives and analysts said.
Having withdrawn its ₹20,000 crore follow-on public offer and been put under watch by rating agencies following a damning report by New York-based short seller Hindenburg Research, the group may no longer bid as aggressively as it did in the past, they said.
Media reports suggest Adani Group now intends to prepay loans worth ₹7000-8000cr in the next 30-45 days with an intention to take the loans against shares to zero. Company is expected to make a decision on the issue on Monday itself. Economic Times report claims, the company has $1.8 billion of promoter-level loans. The loans given by JP Morgan, Credit Suisse and other financials were due later this year but will be paid back at the earliest.
Adani-Hindenburg row: Amid falling Adani group stock prices valuation guru Aswath Damodaran has pointed out a flaw in global economic system that opened a window of opportunity to Gautam Adani and his company. The finance professor said that ESG (environment, social and governance) in the global economic setting is far more deserving of the 'biggest con' label than Gautam Adani. Read More
From Bloomberg-- India’s weighting in MSCI’s emerging-market benchmark has dropped after the brutal selloff in Adani Group’s stocks, giving away its second spot to Taiwan after a rally in the latter’s market.
As of the end of January, Taiwan’s weighting in the MSCI Emerging Markets Index rose to 14.2%, behind leader China’s 31.2%, while India’s fell to the third spot with 13%, according to Bloomberg-compiled data. India captured the second spot from Taiwan in August.
The role reversal between India and Taiwan highlights the contagion of a stock meltdown that has wiped out $112 billion of market value in Gautam Adani’s indebted conglomerate since US-based Hindenburg Research made fraud allegations against the billionaire’s business empire. While the MSCI India Index has lost 4.2% this year, its Taiwan counterpart has surged about 11% as part of a broader North Asian rally induced by China’s reopening optimism.
Hindenburg Research’s decision to only go short on Adani Group securities outside India has highlighted the limitations of the practice in the nation and the peculiarities of the business empire itself. Read More
Communist Party of India MP Binoy Viswam has moved a Suspension of Business Notice in Rajya Sabha under rule 267 demanding a discussion on the Adani group of companies crisis and "huge public money belonging to the common people of India at serious risk of being wiped out in the unfolding crisis."
Earlier on Friday, the Congress and 16 opposition parties demanded a joint parliamentary committee (JPC) or Supreme Court-monitored probe into the Hindunberg report against the Adani Group, alleging a scam.
Indonesian President Joko Widodo urged on Monday his country's financial regulator to strengthen supervision on capital markets in the wake of the crisis at India's Adani Group.
Speaking in an annual financial services authority meeting, Widodo pointed to the depreciation of the rupee and capital outflows from India after the meltdown in stock market values of Adani Group companies.
In order to prevent these things happening in Indonesia, Jokowi, as he is widely known, warned about the negative impact of stock manipulation.
"When it slips in pump and dump, things happening just like in India, please be careful," he added.
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