BackAs Adani Group stocks selloff continues, what should investors do? Here's what experts say
The Adani Group's wealth has more than halved in market value in a week
PremiumThe sell-off in Adani Group stocks entered a third week with flagship Adani Enterprises shares plummeting as much as 10%. The counters have been under heavy selling pressure since January 24 report of the US short-seller Hindenburg Research that made fraud allegations against the group. Adani also decided to call off its ₹20,000 crore follow-on public offering (FPO), a day after being fully subscribed.
“Despite heavy beating in last nine sessions, Adani stocks are placed at higher valuations. However, Adani group company's results are awaited this week and market is waiting for the resuls quite anxiously. But, I am not expecting much upside movement in the stocks. 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," said Avinash Gorakshkar, Head of Research at Profitmart Securities.
The Group has seen wealth erosion of about $118 billion, or more than half of the market value of its companies since the report, even as the conglomerate has repeatedly denied the claims.
Stock exchanges last week placed three Adani stocks - Adani Enterprises, Adani Ports and Ambuja Cements - on additional surveillance measure (ASM) framework, making them subject to more stringent rules. Meanwhile, on Sunday, the Securities and Exchange Board of India (Sebi) issued a public reminder of its commitment to market integrity, saying that its financial markets remain stable and continue to function in a transparent and efficient manner.
“Adani stocks are in continuous sell off mode and smallest of the news event may result in increasing the volatility. We may see a surge in volatility in Adani stocks in near term. Volumes for options linked to Adani stocks have surged amid the volatility. Investors are advised to avoid Adani stocks till the situation improves. However, from long term perspective, Adani Stocks are still a good bet," said Ravi Singh, Vice-President and Head of Research at Share India.
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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