Adani Group's Market Value Crosses Rs 11 Lakh Crore, Shrugging Off Hindenburg-Like Pitfall By OCCRP

The majority of Adani Group-backed stocks settled the trading week from September 4th to 8th on a higher note. The bullish performance led the port-to-power empire to regain over Rs 11.03 lakh crore of market value, which is nearly 58% of the market cap before the nerve-wracking report by Hindenburg Research that baffled the entire financial markets.

The US short seller's report from late January to early March showed one of the biggest billions of dollars of market rout. While Adani-Hindenburg is being heard at the Supreme Court, recently, George Soros-backed Organized Crime and Corruption Reporting Project (OCCRP) released fresh findings into the case. However, investors have shrugged off the OCCRP report as Adani shares recovered significantly.

On Friday, Adani Enterprises stock ended with a 0.5% upside, while Adani Ports gained nearly 2%. Adani Power outperformed by surging nearly 3%, and Adani Wilmar marginally up, however, Adani Green Energy ended in green but on a muted note. But stocks like Adani Total Gas, Adani Energy Solutions, ACC, and Ambuja Cements were down from a marginal drop to a nearly 1% fall. NDTV shares lastly ended with a 0.5% upside.

In the trading week from September 4th to 8th, on BSE, Adani Enterprises stock gained over 2.4%, Adani Ports surged over 2.7%, while Adani Power skyrocketed nearly 10% and Adani Green Energy rallied nearly 6%. Further, Adani Total Gas and Adani Energy Solutions advanced by 1.4% and 0.9% respectively. On the contrary, FMCG player Adani Wilmar ended the week on a flat note. Also, in cement stocks, Ambuja inched up by 0.5%, while ACC's weekly performance was a marginal drop. Media stock NDTV underperformed compared to other Adani-backed stocks with a weekly fall of 1.5%.

As of September 8, 2023, flagship firm Adani Enterprises' m-cap stood at Rs 2,87,303.08 crore, while Adani Ports' m-cap was around Rs 1,78,243.87 crore. Further, Adani Green Energy and Adani Power held an m-cap of Rs 1,58,601.25 crore and Rs 1,42,436.76 crore respectively. These were Adani's top stocks which have a market cap of over Rs 1 lakh crore.

Meanwhile, Adani Energy Solutions has an m-cap of Rs 92,909.39 crore, Adani Total Gas' m-cap of RS 70,910.26 crore, and Ambuja Cements' m-cap was at Rs 87,189.68 crore. Also, ACC's m-cap stood at Rs 38,010.96 crore, Adani Wilmar's m-cap was at Rs 46,112.60 crore, and lastly, NDTV's m-cap was at Rs 1,372.92 crore.

Together, these Adani-backed firms have a market value of Rs 11,03,090.77 crore as of September 8, 2023. Before Hindenburg's shocking report in late January, the market cap of Adani Group firms stood at approximately around Rs 19 lakh crore.

The optimism in Adani shares can be attributed to bulk deals by foreign investors such as GQG Partners and retainment in ratings on listed bonds, and hence, offsetting the pitfalls by OCCRP. Since March this year, Adani Group has recovered over Rs 5 lakh crore of m-cap.

Last week, OCCRP launched a report on August 30, specifically pointing out the essence of the allegations by the US short seller, and the investigation led by the Indian regulatory after the Adani-Hindenburg case was brought to the Supreme Court.

Exclusive documents obtained by OCCRP stated how hundreds of millions of dollars were invested in publicly traded Adani stock through opaque investment funds based in the island nation of Mauritius.

However, the port-to-power empire categorically rejected these recycled allegations. Adani said, "These news reports appear to be yet another concerted bid by Soros-funded interests supported by a section of the foreign media to revive the meritless Hindenburg report. This was anticipated, as was reported by the media last week."

Hindenburg in a bombshell report on January 24, accused Adani Group of brazen stock manipulation and accounting fraud scheme over the course of decades. Adani Group has denied Hindenburg's allegations as well.

Last month, Adani Group announced that its portfolio delivered yet another outstanding performance with an all-time high quarterly profit (EBITDA) of Rs 23,532 crore, 42% higher year-on-year. The June quarter FY24 results compendium for its portfolio of listed companies has been released.

The robust portfolio performance was primarily driven by the renewable power business under Adani Green, infrastructure businesses under Adani Enterprises, and cement businesses under Adani Cement. Adani Green reported an EBITDA of Rs 2,200 crore, a 67% rise Y-o-Y. This was on the back of an increase in operational capacity by 43% to 8,316 MW. The adjacent cement business also showed a strong operating performance because of cost optimization and improving synergies. EBITDA per tonne increased to Rs 1253 from Rs 888 in the June 22 quarter and INR 1079 in the March 23 quarter. As a result, EBITDA of the cement business grew 54% Y-o-Y to Rs 1,935 crore.

Also, on August 24, Adani announced that through a series of strategic initiatives, has increased its liquidity position at the portfolio level to finish with a cash balance of Rs 42,115 crore at the end of the June quarter. The portfolio companies diligently focused on bolstering their financial standing, ensuring a robust foundation for their ambitious projects.

Further, Adani revealed that significant deployment of equity resulted in total equity increasing to 55.77% of the total assets as compared to 40.16% at the end of FY19. Equity deployed by the end of FY23 was Rs 2,35,812 crore, much higher than net debt of Rs 1,87,087 crore.

Since the start of FY24, billions of dollars have flowed into Adani Group-backed firms through the open market. With mass block deals since March 2023, the port-to-power empire is expanding as well.

The US-based boutique investment firm GQG Partners has made one of the largest buying in the history of the Indian market via the open market, and that too in Adani shares.

Of the total 10 Adani stocks, GQG alone has increased its stake in five of them since March 2023. The first tranche of investment was Rs 15,446 crore ($1.87 billion) by GQG in four Adani shares in March. The leading US-based Global Equity investment boutique bought Rs 5,460 worth of shares in Adani Enterprises, Rs 5,282 crore shares in Adani Ports, Rs 1,898 crore shares in Adani Total Gas, and Rs 2,806 crore investment in Adani Green Energy during March.