Adani Enterprises Recovers after Falling 35%; 6 Other Group Companies Hit Lower Circuit
Moneylife Digital Team 03 February 2023
Shares of Adani group's flagship Adani Enterprises Ltd recovered and closed Friday in the green after falling 35% and hitting a new 52-week low at Rs1,017.10 in early trading. Three other companies from the Adani group, Adani Ports And Special Economic Zone Ltd, Ambuja Cement Ltd and ACC Ltd, also recovered from an early loss and closed the week in the green.
 
 
On Friday morning, seven out of the 10 Adani group companies hit lower circuits. After falling 35% to hitting a new 52-week low at Rs1,017.10, Adani Enterprises recovered and ended the day 1.25% up at Rs1,584.20 on the BSE. The 30-share Sensex ended the week 1.52% up at 60,841.88 points. From its 52-week high of Rs4,189.55, reached on 20 December 2022, Adani Enterprises has lost nearly 62% as of Friday.
 
Shares of Adani Ports And Special Economic Zone, Ambuja Cement and ACC closed Friday 7.98%, 6.03% and 4.39% higher at Rs498.85, Rs373.70 and Rs1926.30, respectively.
 
Adani Transmission Ltd and Adani Green Energy Ltd, however, hit 10% lower circuits and a new 52-week low at Rs1,401.55 and Rs934.25, respectively.
 
Shares of four other companies from the Adani group that hit 5% lower circuits are: Adani Power Ltd (Rs192.05), Adani Total Gas Ltd (Rs1,625.95), Adani Wilmar Ltd (Rs400.40) and New Delhi Television Ltd (NDTV) (Rs211.75).
 
Separately, S&P Dow Jones Indices says it has decided to remove Adani Enterprises from Dow Jones Sustainability Indices following a media and stakeholder analysis triggered by allegations of stock manipulation and accounting fraud.
 
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)
 
Comments
fnetwork
1 year ago
Response to Sanjeev:
Remember Harshad Mehta 1990-1992? His middle name was my Father's first name "Shantilal". Mme Sucheta Dalal became a star exposing him. I was involved al-be-it indirectly as Advisor to Kothari in Chennai. Under cover of Mehta's scam, the Kothari sibling - married to a sister of Ambani, bought up his shares driving it up from under Rs 20 to as high as Rs 140. I begged him to sell, but he refused. The stock eventually came down to Earth and then disappeared. The sibling could afford the loss married into the Ambani family. Unfortunately, we are retained and paid by many Indian tycoons and would-be tycoons but theynever follow our advice. MY Q to you is - that was 30 years ago. Has anything changed? Not just in India but also in the UK and the USA. It has gotten worse. With derivatices, indexes, ETF's galore, Killer Whales and Great White Sharks prowl and prey on greed of the small retail investor. To her credit, Sucheta tries hard to expose scams when she sees them with one eye on "solicitors" as scammers resort to solicitors to silence whistleblowers.

Sanjeev B
1 year ago
fnetwork you a cynically missing the point. The objective is not to get Adani out of trouble. The objective is to clean up the Indian financial market.
Why are Indian PSU banks lending against securities that are trading at these crazy valuations? What compulsion do they have to do this? Please don't advocate a further cover up. It would be better to acknowledge and work on fixing the underlying problem of over leverage.
If i had your hotline to Adani i would advise him to stop borrowing more than he can chew.
fnetwork
1 year ago
I have emailed Gautam with a warning to have Team Adani focus on the dollar bonds. If they move to "junk" category he will never be able to access the foreign credit markets and then, even domestic creditors, will get nervous. What Nathan did is short the dollar bonds and buy a cocktail of derivatives from a foreign bank, never entering the Rupee market where India Inc has control. His objective is to push the bonds down below 60 to create a situation whereby Adani is denied credit and falls into the category of a Pramod Mittal, Anil Ambani, the Ruias. Judging from my linkedin basket, even Indian brokerages are now focusing on PE ratios, eschewing HYPE. Sooner or later both Total and Abu Dhabi are going to get nervous. I advised Gautam that henow has to be as clever as Elon Musk, the GOAT and the greatest Levitator of all time. A JV with Musk/Tesla will immediately resurrect his fortunes.
Nahom
1 year ago
Enron and Lehman also went down and a little up for several days before death.
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