MUMBAI
:
The Adani Group of stocks showed its biggest increase in market capitalization of over a trillion rupees for the first time since the Hindenburg report surfaced, days after the Supreme Court reserved its judgement on a bunch of public interest litigations pleading for a court-monitored investigation into allegations of corporate malfeasance and manipulation against the ports to renewables conglomerate.
The market, which was closed for the Guru Nanak Jayanti holiday on Monday, reacted to the conclusion of the SC hearing on Friday as investors interpreted some of the SC’s observations as its having confidence in Sebi’s investigation pertaining to the Hindenburg report that was released on 24 January.
This led to short-covering and fresh buying in group counters causing a total ₹1.04 trillion rise in the market cap of all 10 listed group companies. The charge was led by flagship Adani Enterprises, the group flagship, whose 8.9% rise contributed ₹22,578 crore to the group level market cap.
Also, there was heavy investor interest in Adani Power, Adani Green, Adani Energy Solutions, Adani Total Gas and Adani Ports, which rose between 5% and 19%.
Market analysts expect the positive investor sentiment to continue for a few more sessions.
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“The SC sees no reason to supersede Sebi and investigate matters through an SIT (special investigation team),” said Rajesh Baheti, MD, Crosseas Capital. “There could be further rounds of sentimental buying in the group counters.”
According to Rajesh Palviya, SVP (technical & derivatives) at Axis Securities, the latest SC ruling had “eased the negative hangover on prices as the court effectively put paid to questions around Sebi’s credibility to probe the Hindenburg fallout.”
Palviya also expects the upside momentum to persist on “sentimental buying.”
An indication of heightened investor interest was apparent in delivery-based buying despite traded volumes surpassing their six-month averages. For instance, the traded volume on Adani Enterprises at 1. 2 crore shares was almost three times the six-month average traded volume of 42 lakh shares. Yet, delivery of 16 lakh shares happened.
In the case of Adani Green, the second-largest contributor to the group m-cap, Tuesday’s traded volume at 1.16 was almost five times that of the six-month average volume. This was accompanied by delivery of 19.7 lakh shares.
Apart from the buying, huge bullish positions were built up on the futures counters of Adani Enterprises and Adani Ports. AEL witnessed aggregate open positions rising by 53% accompanying the price rise, while Adani Ports’ aggregate open positions rose by 44%. A rise in open positions alongside price increase indicates bullish sentiment.
Adani Power and Adani Enterprises were the top traded counters on NSE, ahead of HDFC Bank and Reliance. Total turnover of Adani Power stood at ₹2,972 crore while that of Adani Enterprises was ₹2,893 crore against HDFC Bank’s ₹2,182 crore and Reliance’s ₹1,643 crore.
The rise in turnover of six Adani group stocks alone accounted for 12.4% of NSE’s total traded turnover of ₹81,134 crore on Tuesday. Two of the 10 stocks, including Adani Power and Adani Ports, trade above the prices coinciding with the release of the Hindenburg report. Adani Power trades 63% above the price while Adani Ports trades 10% above the Hindenburg related price.