As the stocks of Adani Group surged on Tuesday, continuing its recent rally, the conglomerate’s port unit became the first of the group’s 10 entities to fully recoup all of the losses triggered by the release of Hindenburg Research’s bombshell report accusing the group of stock price manipulation in January.
As shares of Adani Ports and Special Economic Zone Ltd. surged by up to 7.7%, all of the group’s 10 stocks climbed in Mumbai trading. Following a similar surge on Monday, shares of flagship Adani Enterprises Ltd. spiked almost 20%. The recent rally was set off last Friday after an Indian court panel issued a report which found there was no conclusive evidence of any manipulation of stock-price, as the US short-seller Hindenburg had alleged.
Since Thursday’s close, the combined market value of the 10 Adani stocks has increased by roughly $22 billion. The reduction in overall value since the release of Hindenburg’s report is now at roughly $105 billion, down from $153 billion, at its worst point.
The port unit is viewed by market watchers as the conglomerate’s crown jewel, and houses some of the billionaire’s most lucrative assets. Among sell-side analysts, it is also the most widely tracked Adani stock. According to data from Bloomberg, currently all 20 analysts monitoring the stock have rated it a “buy.”
Deven Choksey, managing director of KRChoksey Shares & Securities Pvt. in Mumbai said, “Fundamentals of Adani Ports’ business have remained solid. Its strong cash-generating ability means that it will get the first priority among investors,” adding that domestic institutional investors, who generally favor companies which generate high quantities of cash, under-own the stock.
On Tuesday, two bonds of Adani Ports in US-currency, which mature in 2027, were up by about 0.2 cents on the dollar, though they are still trading approximately 6% below their level prior to the Hindenburg report.
A court panel, in a 173 page report released last week, reported that it saw, “no evident pattern of manipulation” in the spike in the price of stock in Adani’s companies, which could be attributed to “any single entity or group of connected entities,” when it examined data from the markets regulator Securities and Exchange Board of India, or SEBI.
This was a reference to one of Hindenburg’s central allegations, which was that offshore shell companies with ties to the Adani family were manipulating the stock price higher by bidding up its shares.
However critics note, the investigations are continuing, and the regulator will continue its probe until August 14th under the court’s authority.
