Adani Group Market Cap Declined by ₹2 Lakh Crore After US Allegations

After the recent US Department of Justice (DoJ) corruption charges on Gautam Adani, Sagar Adani, and six others, Adani Group stocks faced a jolt on Thursday, November 21, 2024. The Adani Group market cap declined by ₹2.24 lakh crores and reached ₹12.06 lakh crores. With a market cap fall of 15.66%, it is the third-largest one-day fall of the Adani group on a percentage basis. So, let’s uncover all the Adani stock’s reaction and how it can impact the Adani Group companies in the long run.

Adani Stocks Turned Red

Among all the Adani Group stocks, Adani Enterprises share price faced the biggest impact and fell 22.6% on Thursday. Other stocks, which face a jolt are Adani Energy Solutions, Adani Green Energy, NDTV, etc.

From the promoters, FPIs, and DIIs to retail investors all faced a loss in market cap in the last two days. From Nov 19 to Nov 21, the promoter’s market cap losses were ₹1.56 lakh crores and retail investors market cap losses were ₹8,687 crores. Foreign portfolio investors’ (FPIs) market cap also fell by ₹29,595 crores.

Here is the list of Adani Group stocks that fell straight away after the alleged case:

Stock	Sector	% Fall in 1-Day
Adani Enterprises	Trading	-22.6%
Adani Energy Solutions	Power Generation & Distribution	-20.0%
Adani Green Energy	Power Generation & Distribution	-18.8%
Adani Ports	Marine Port & Services	-13.5%
Ambuja Cements	Cement	-11.9%
Adani Total Gas	Gas Distribution	-10.4%
Adani Wilmar	Edible Oil	-9.9%
Adani Power	Power Generation & Distribution	-9.1%
ACC	Cement	-7.2%
Sanghi Industries	Cement	-6.2%
NDTV	Media – Print/ Television	-0.6%

*(As on November 21, 2024)

PSU Banking Stocks Downfall

The stock fall is not limited only to the Adani Group stocks. It has also impacted the public sector banks’ stocks which had a high share in the Adani group debt and equity profile.

As on March 31, 2024, Adani Group had a total debt of ₹2.41 lakh crores, and Indian lenders have a share of more than ₹88,000 crores. SBI, PNB, Axis Bank, and LIC stocks all fell on Thursday. This can have both short and long-term impacts on the PSU banks with a high investment in the Adani group.

Impact on Adani Group Funding and Expansion Activities

1. Bump in Funding Potential

The Adani group’s ability to raise funds from overseas countries and the public market may be affected in the short term and they have to go with private funding at higher interest rates. The company plans to raise dollar funds for its transmission and port businesses can also face roadblocks.

2. Kenya Expansion Plans Scrapped

Kenya government on Thursday scrapped the Adani Group’s $736 million power transmission deal and airport expansion contract. This deal was signed between Adani Energy Solutions and Kenya Electrical Transmission Company in October 2024 with a tenure of 30 years.

Along with that, the Kenya Government also canceled the procurement process to expand its airport where it was considering to take it forward with the Adani Group.

3. Adani Green Bond Sale Stopped

Adani Green Energy had withdrawn a $600 million valued 20-year bond sale that closed on Wednesday, a day before the bribery charges. Adani Group bonds also fell between 5% to 10% on November 21, 2024.

Adani Group: Debt Obligations

As on September 30, 2024, Adani Group debt profile includes 42% sharing from domestic banks, 27% from global banks, 23% from international capital markets, and 5% from domestic capital markets.

The consolidated net debt to EBITDA ratio was less than 2.5 times and gross debt (as on September 2024) was approximately ₹2.58 lakh crores. Adani Group does not have any big loans to repay and is said to be cash-sufficient to handle the short-term fund blockage. The debt to capex ratio is 2 times which is manageable and the company can fulfill its debt obligations as of now.

Adani Group: Business Verticals

Adani Group is backed with strong verticals and wide footprints in the country. Here are some of the strong business segments (subsidiaries) of the group:

• Adani Green Energy

Adani Green Energy is the largest renewable energy company in India with a capacity of 11.2 GW. Adani Green Energy market capitalization had grown by 23.7% YoY to ₹1,81,593 crores on November 21, 2024.

• Adani Energy Solutions

Adani Energy Solutions had a strong transmission network of 23,269 circuit kilometers. Adani Energy Solutions market capitalization had grown by 2.5% YoY to ₹83,813 crores on November 21, 2024.

• Adani Ports and SEZ

Adani Ports and Special Economic Zone holds a 27% market share in India. It has 15 ports and a total capacity of 627 MMT. Adani Ports and SEZ market capitalization had grown by 39.2% YoY to ₹2,40,792 crores on November 21, 2024.

• Others

Adani Airport Holdings handled 23% of India’s passenger traffic with the 7 airports. Adani Cement with a capacity of 89 MT is the second-largest cement producer in India.

Adani Group: Recent Fundraising Drive

Adani Group has recently raised funds through different routes such as QIP and NCDs.

• October 2024: Adani Enterprises has raised $500 million through QIP (Qualified Institutional Placement).
• September 2024: Adani Enterprises has raised ₹800 crores through NCDs (Non-Convertible Debentures).
• August 2024: Adani Energy Solutions raised $1 billion through QIP.

Conclusion

Amidst the allegations, Adani Group’s fundraising, loan refinancing, and expansion activity may take a hit. But the long-term impact is disclosed how the Adani Group will take it and where this case goes. On Friday, November 22, Adani Green Energy share price recovered and rose 6% and Adani Enterprises share price gained 4%. Adani Ports rose 2% while Ambuja Cement jumped 6%.

While market ups and downs are here to stay, your investing journey should not take a pause. Open a Demat account with SMC Global Securities and invest like a pro.

Reference:

https://economictimes.indiatimes.com/markets/stocks/news/adani-stocks-take-rs-2-24-lakh-crore-hit/articleshow/115544965.cms?from=mdr
https://economictimes.indiatimes.com/markets/stocks/news/rs-2-lakh-crore-gone-adani-stocks-record-worst-day-since-hindenburg-crisis/articleshow/115516018.cms?from=mdrv

Author: All Content is verified by SMC Global Securities.