4 Adani Group Companies, Including Adani Enterprises, Hit 52-week Low

Moneylife Digital Team 02 February 2023

Investor Interest

Stock prices of Adani group companies continue to crash, with four, including its flagship Adani Enterprises Ltd, hitting a 52-week low on the BSE. Two companies, Adani Green Energy Ltd and Adani Transmission Ltd, also breached the lower circuit while hitting their 52-week low prices. Adani Ports And Special Economic Zone Ltd was the other company to hit the new 52-week low on Thursday. Adani Enterprises announced the withdrawal of its red herring prospectus (RHP) filed with the registrar of companies (RoC) in Gujarat.

Five companies with Adani in the name and the group's newly acquired New Delhi Television Ltd (NDTV) hit lower circuits on the BSE. Except Ambuja Cements Ltd and ACC Ltd, all Adani group companies ended the day in the red.

Adani Enterprises ended Thursday 26.50% down at Rs1,564.70, after hitting its 52-week low of Rs1,513.90, on the BSE, while the 30-share Sensex closed marginally up at 59,932.24 points. Over the past eight trading sessions, since 24 January 2023, Adani Enterprises lost nearly 55%. On 24th January, the scrip ended at Rs3,442.75. It closed at Rs1,564.70 on 2 February 2023 (see graph below).

Adani Ports And Special Economic Zone also hit its 52-week low of Rs423 before closing 6.13% down at Rs462.

While hitting their 52-week low, shares of Adani Green Energy and Adani Transmission also hit lower circuits on Thursday. Adani Green Energy and Adani Transmission ended the day 10% down at Rs1,038.05 and Rs1,557.25, respectively.

Adani Total Gas Ltd also hit its 10% lower circuit and ended at Rs1,711.50. Three other companies from the Adani group with a lower circuit of 5%, Adani Power Ltd, Adani Wilmar Ltd and NDTV ended at Rs202.15, Rs421.45 and Rs222.85, respectively.

After hitting a day's low of Rs315.30, Ambuja Cement recovered and closed Thursday 5.33% higher at Rs352.45. ACC, on the other hand, ended the day flat at Rs1,845.35.

The Adani group on Wednesday evening decided to call off its Rs20,000 crore follow-on public offer (FPO) of Adani Enterprises, citing the unprecedented situation and the current market volatility.

In a regulatory filing, Gautam Adani, chairman of Adani group, says, "...the market has been unprecedented, and our stock price has fluctuated over the course of the day. Given these extraordinary circumstances, the company's board felt that going ahead with the issue will not be morally correct. The interest of the investors is paramount and hence to insulate them from any potential financial losses, the board has decided not to go ahead with the FPO." (Read: Adani Enterprises Withdraws FPO, To Refund Money to Investors)

Adani Enterprises has also decided to withdraw its RHP filed with RoC in Gujarat. "...decided not to proceed with the offer and withdraw the RHP on account of the prevailing market conditions because of which there has been extreme volatility in the stock price of the company, other commercial and strategic considerations, and in order to protect the interest of the investors," it says in a regulatory filing.

The company also decided to terminate agreements with its book-running lead managers for the FPO. "Further, we wish to inform you that the company shall forthwith refund to the bidders the entire application bid amounts or subscription amount received in the offer in accordance with applicable law. In the event that there is a delay in making refunds beyond such period as prescribed under applicable law, the company shall pay the requisite interest to the bidders in the offer at such rate as prescribed under applicable law."

Shares of all Adani group companies have been on a southern journey since the past week when US-based Hindenburg Research published a report claiming "the seven key listed companies of Adani group are 85%+ overvalued even if you ignore our investigation and take the companies' financials at face value." (Read: Adani Threatens, Hindenburg Welcomes Legal Action; Stocks Continue To Crash on Friday)

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