Adani group shares in downward spiral, 4 stocks at lower circuit; Adani Enterprises jumps 2% after Q3 results

Adani group shares in downward spiral, 4 stocks at lower circuit; Adani Enterprises jumps 2% after Q3 results

Sell-off in Adani group stocks continued on Wednesday with four scrips hitting the lower circuits in opening trade. The rout continues even after the onglomerate said it has adequate cash reserves and its listed companies are able to refinance their debts, in a credit report aimed at reassuring investors after last month’s critical investigation by US short-seller Hindenburg Research that battered Adani stocks and bonds. Adani Power, Adani Green Energy, Adani Total Gas, and Adani Transmission stocks tumbled to hit 5% lower circuit. Meanwhile, Adani Enterprises shares were trading marginally in green at Rs 1,762 apiece, after the company reported Rs 820 crore net profit for the quarter ended 31 December 2022.

Adani Ports shares fell nearly 1% on NSE to Rs 562. Adani group-owned Ambuja Cements shares were up 1.13% at Rs 340, while ACC fell 0.25% to Rs 1,825 on the National Stock Exchange. NDTV shares were trading volatile fluctuating between gains and losses in early trade. The stock was last trading at Rs 187 on NSE, down 0.5% from the previous close. Adani Wilmar shares were trading 2% higher at Rs 401 apiece on NSE intraday.

More than 81% of the EBITDA of Adani Group companies came from infrastructure businesses, which generate a steady cash flow, the report showed. Based on a current portfolio of assets worth more than Rs 3.7 lakh crore, it stands to generate earnings of more than Rs 60,000 crore, according to the document. Financing is a “conservative” mix of debt and equity, it said. Some of the group’s bonds dropped to distressed levels, while more than $125 billion has been wiped from its stock market value since the US-based short seller’s investigation went public.

Adani Group firms’ debt load under scrutiny

Prior to Adani group’s credit report, Moody’s Investors Service cited concerns about Adani’s ability to raise capital or refinance maturing debt in the coming years. S&P Global Ratings also cut the rating outlook for Adani Ports and Special Economic Zone Ltd. and Adani Electricity Mumbai Ltd. to negative from stable. “There is a risk that investor concerns about the group’s governance and disclosures are larger than we have currently factored into our ratings,” it said.

All three major credit assessors left their ratings on Adani’s companies unchanged, something that Adani Group said “signifies the underlying credit quality with adequate financial profile,” in its report Tuesday. It is worth mentioning that earlier in August year, CreditSights, a Fitch Group unit also highlighted the debt load of Adani’s firms when it described the conglomerate as “deeply overleveraged.” Adani Group, however, rebutted the CreditSights assessment then, and it has repeatedly denied Hindenburg’s allegations as well.