Shares of some Adani group companies continue to fall sharply

Investors in Adani Group’s shares have now almost lost 5.7 trillion ($70 billion) last week following the release of the Hindenburg Report alleging accounting fraud and manipulation.

However, gains in Adani Enterprises, an index constituent, partly contributed to the benchmark Nifty and Sensex indices closing in the green after a turbulent session.

Nifty closed at 17,648.95, up 304 points between the day’s high and low, while Sensex ended 0.29% higher at 59,500.41, up 0.25%, amid turmoil in Adani shares.

Investors posted combined losses in Adani Group shares 1.39 trillion in assets were halted on Monday with trade in Adani Total Gas, Adani Green, Adani Power, Adani Wilmar and NDTV hitting their respective lower circuits, ranging from 5-20%. Although Adani Enterprises closed with a gain of about 5 percent. At 2,892.85, it is still trading at a 7% discount to the floor price of the FPO. 3,112.

In view of the increased volatility, the exchanges have halved the price band to 10% in Adani Transmission, Adani Green and Adani Total Gas.

only one day left to As the Rs 20,000-crore FPO nears closure, analysts believe recovery in Adani Enterprises is the key to attract retail and HNI participation.

Adani Group’s market capitalization lagged behind that of Reliance Industries and its units for the second consecutive session as investors lost wealth in other group stocks. 13.36 trillion vs RIL 16.18 trillion – and founder Gautam Adani has slipped a rung to the 8th spot on the Forbes Billionaire list with a net worth of $88.2 billion. While Adani is still two places above Reliance Industries Chairman Mukesh Ambani, who has a net worth of $84.1 billion, that lead narrowed to about $4 billion from $13 billion on Friday.

Adani Enterprises remained among the top three traded stocks in the derivatives segment on Monday, while another group stock, Ambuja Cements, remained restricted for fresh derivative trades on the NSE.

Market players were cautious in their comments when asked about the tussle between bulls and bears on Adani counters ahead of the Union Budget and US Fed policy meeting and its impact on the market.

Amit Gupta, Fund Manager, ISec PMS, said, “Adani Enterprises’ FPO has received encouraging response from a few qualified institutional bidders, but more clarity will emerge after the FPO closes tomorrow.”

“It is difficult to make a near-term call as it will be determined by the success of the FPO and the quality of the funds it attracts,” said Gaurav Dua, senior vice-president, head of capital markets strategy at Sharekhan by BNP Paribas. “The controversy triggered by Hindenburg has impacted banking stocks, which have a significant weighting in the benchmark Nifty index, whose range has subsequently fallen from 17,800-18,000 to 17,300-17,800. Besides, there are several events this week, such as Budget, and the US FOMC meeting, which could increase volatility.”

Market volatility was underpinned by a net sale by foreign portfolio investors of a provisional 6,793 crore as also domestic institutional investors bought a provisional 5,513 crore shares.

After a volatile session, insurer Life Insurance Corp of India clarified that its exposure to Adani Group stood at 0.975% of its total assets under management at book value.

LIC’s total equity purchase price of Adani Group shares over the years is 30,127 crore, and the market value for the same as on January 27 was 56,142 crores. The total amount invested under Adani group is 36,474.78 crore as on date. However, these investments are made over a period of time.

Adani Enterprises and Bajaj twins led the gains in the Nifty, which rose 2-5% after strong December quarter data.

Vinod Nair, Head of Research, Geojit Financial Services, said, “Adani’s reaction had a mixed effect on the stock group and the market.” Expecting a scientific assessment report by a strong independent third party or government is dim in the short term. Markets will now focus on the budget and Fed policy.”