Adani Stocks Crazy 2023: From Scandalous Short Seller's Report To GQG Investments; Top Picks In 2024

The year 2023 has been more bitter than sweet for billionaire Gautam Adani who runs the port-to-power empire Adani Group. Stripped off from its glorious days at the start of 2023 due to a US-based short seller's controversial allegations, to witnessing billions of dollars of market rout, and to huge fundings from foreign portfolio investors, Adani stocks have seen all of these. However, the year ends with the impacts of Hindenburg's report still lingering, as the majority of Adani stocks are ending 2023 in red. Also, these stocks' market values together have not yet managed to reach the pre-Hindenburg levels, but foreign investors continue to be optimistic. It will be keenly watched to what is stored in 2024 for this Group and its stocks!

2023 of Adani Group stocks:

It needs to be noted that Adani shares have recovered significant losses by the end of the year despite ending lower.

Year-to-date, Adani Enterprises, the flagship company of the Group, dropped by nearly 27% on BSE. While Adani Green Energy dipped by 19%, Adani Wilmar slipped by over 39.54%, and Adani Energy Solutions shed nearly 60%. But it would be Adani Total Gas that has taken the most hit in 2023 with a nosedive of nearly 72%. Other stocks like NDTV shares are down by 21%, ACC is lower by 14%, and Ambuja Cement shares have declined by a little over 4% so far in 2023.

But there were positives as well. For instance, Adani Power is the best-performing stock in the group despite the Hindenburg saga and has risen by nearly 72%, followed by Adani Ports' share price which gained by nearly 25%. Both the stocks have seen huge upside owing to a rise in buying from FDIs, block deals, mutual funds investment and mega projects wins.

Together, the Adani Group-led stocks market cap is over Rs 13.95 lakh crore as of December 22, 2023. This is just 72.65% of the market cap of Rs 19.20 lakh crore that was before the Hindenburg report.

Talking about Adani stocks 2023, Manish Chowdhury, Head of Research, StoxBox said, "2023 was a crazy ride for Adani Group stocks and can be best summed as a tale of two halves. In the first half, Adani Group stocks were under severe pressure following allegations of stock manipulation and accounting fraud in the Hindenburg report. However, stocks staged a strong recovery aided by capital infusion by GQG Partners, favourable indication from the Supreme Court and a clean chit from the US authorities over Hindenburg allegations. Going forward, we expect some volatility due to news flows surrounding the Supreme Court's final decision."

Adani Group's Crazy 2023:

Up until January 24th, Adani Group was the rising star of 2023 after leading a massive bull rally in 2022 despite uncertain macro conditions. However, the ground beneath Adani Group crumbled after a New York-based short seller Hindenburg released its scandalous report on January 24, accusing Gautam Adani and its empire of brazen stock manipulation and accounting fraud scheme over the course of decades.

These allegations led to a series of hysteria and panic selling in Adani shares till the first week of March, which resulted in over 134 billion dollars of erosion, pushing Gautam Adani's net worth to even below $50 billion. Gautam lost its title of the third richest man in the world, sliding to near 25th rank.

Currently, Adani is in 15th spot with a net worth of $83 billion at the Bloomberg Billionaire Index.

That was not all, Adani was also roped into back-to-back regulatory investigations and Supreme Court hearings.

Troubled-Adani was also pulled into allegations by George Soros-backed Organised Crime and Corruption Reporting Project (OCCRP) which released fresh findings related to Hindenburg's report. The OCCRP report 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 OCCRP report could not create havoc like Hindenburg on Adani shares as bulk deals by foreign investors such as GQG Partners and retainment in ratings on listed bonds, offset pitfalls by these mind-boggling research reports.

Adani has denied both allegations by Hindenburg and OCCRP.

As per the report, global investors pumped in over $6 billion of funds in Adani shares, which lifted the overall spirit in Adani stocks. US-based boutique investment firm, GQG Partners, which is backed by GQG Partners is one of the largest foreign investors in Adani shares in 2023 to the tune of about $4 billion.

Apart from this, recently, the Supreme Court has reserved its judgement regards to PILs that sought a court-monitored investigation into Hindenburg's allegations on Adani shares which led to extreme volatility in these stocks. Furthermore, the apex court stated that they do not consider Hindenburg's report as an ipso facto determination of facts, and reiterated that Sebi's sole reason for investigation was to protect against such kind of volatility in the future. This was another booster for Adani shares in recent times.

Also, as per the report, the US agency DFC earlier this month concluded that the accusations by Hindenburg on Adani Group were irrelevant.

What To Expect In 2024?

Chowdhury said, "Our sense is that the Group may come out unscathed from the Hindenburg allegations which could fuel further rally in Adani Group stocks in 2024."

Among top picks in Adani stocks, he said, "Though some stocks in Adani Group still looks expensive from a valuation perspective, we remain positive on Adani Ports from a long-term perspective considering the economic-centric nature of the business, high entry barriers and long duration concessions to the business. Other stocks from the Adani pack that investors can keep an eye includes Adani Enterprises and Ambuja Cements."

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.