All Adani Shares Up 1.5-6% On January 1 Ahead of Adani Ports Board Meeting: Has Hindenburg Saga Faded?

It was a Happy New Year for shares under the ambit of port-to-power empire Adani Group. On January 1st, all Adani shares traded bullish with gains up to 1.5% to as high as 6%. In percentage terms, Adani Wilmar was the top gainer in the Group followed by Adani Enterprises, Adani Ports and NDTV. Not just that Adani's cement giant Ambuja also touched a new 52-week high. Does this mean the Hindenburg saga shocks have faded and fresh buying could be seen in Adani shares in 2024?

On January 1, 2024, Adani Group's flagship company, Adani Enterprises gained by 3.5% with an intraday high of Rs 2,947.8 apiece, while the star performers of 2023 in Adani Group namely Adani Ports and Adani Power jumped by 3.22% and 1.8% respectively. Further, Adani Total Gas surged by 2.5%, Adani Green Energy jumped 1.51%, and Adani Energy Solutions zoomed by 2.30%. Meanwhile, Adani Wilmar, the FMCG stock of the Group, saw the most buying in percentage terms as it rose by 5.8%.

Coming to the cement stocks, Ambuja Cement shares rallied by 3.21% to hit a new 52-week high of Rs 537.65 apiece, while another cement player ACC shares climbed by 2.4%. Lastly, the Group's media stock NDTV gained by 3.96%.

The performance in Adani shares comes ahead of the Adani Ports board of directors meeting due on January 3rd for consideration and approval of a proposal to issue Non-Convertible Debentures by way of public offering, preferential allotment and/or combination thereof as may be considered appropriate, or any other eligible securities, subject to all such regulatory/statutory approvals as may be required.

Last year, the majority of Adani shares ended in the red with the exceptions of Adani Power and Adani Ports due to a US-based short seller Hindenburg's report in late January 2023 which accused the billionaire Gautam Adani and his conglomerate of brazen stock manipulation, and other frauds. Adani Group denied the accusations, however, found itself trapped in a severe volatility that led to market rout of up to 134 billion dollars of erosion, pushing Gautam Adani's net worth to even below $50 billion.

Nevertheless, Adani stocks saw a better nine months of FY24, compared to the last quarter of FY23 (January - March 2023), recovering massive losses by the end of 2023 due to the shocks of the Hindenburg saga. Nevertheless, most of Adani's shares still stayed in red with Group's market cap close to Rs 14 lakh crore by the end of December 2023, compared to Rs 19.6 lakh crore that was before Hindenburg's report -- this will be nearly Rs 6 lakh crore loss in market value in 2023.

Manish Chowdhury, Head of Research, StoxBox stated that Adani Group may come out unscathed from the Hindenburg allegations which could fuel further rally in Adani Group stocks in 2024.

Meanwhile, some of the key factors that make Adani shares attractive are:

As per the latest CRISIL report which cited NITI Aayog said that India may witness a 20 GW electrolyser demand by 2030. There have been several announcements by key industry players towards boosting the electrolyser production capacity in India. Adani New Industries Limited (ANIL) is currently setting up a 5 GW integrated electrolyser plant and has signed an agreement with Cavendish Renewable Technology (CRT) to manufacture electrolysers based on AE, PEM and SOEC technologies.

Data showed that Adani has also been the second-largest exporter of solar modules. From April to September 2023, the top 10 exporters of solar modules have a total of 2,879 MW capacity. Of these, Waaree Energies has been a leading player in the solar module export market with 1,520 MW, followed by Adani Mundra Solar which has 1,033 MW.

CRISIL's note said, "Competitive mapping covers the details of companies, their products and services within a given market to understand competitive intensity. The top 5 players namely, Waaree Energies, Adani Solar (Mundra), Goldi Solar, Vikram Solar, and Emmvee Photovoltaic account for about 45% of the total domestic ALMM enlisted module manufacturing capacity of ~19.5 GW."

Also, despite being hit by the Hindenburg report heavily, Adani Group still managed to raise more than $15 billion in equity. A double of that is said to have been raised in debt during 2023. GQG Partners alone invested $4.3 billion in five Adani shares.

Apart from this, recently, the Supreme Court has reserved its judgement regards to PILs that sought a court-monitored investigation into Hindenburg's allegations on Adani shares which led to extreme volatility in these stocks. Furthermore, the apex court stated that they do not consider Hindenburg's report as an ipso facto determination of facts, and reiterated that Sebi's sole reason for the investigation was to protect against such kind of volatility in the future. This was another booster for Adani shares in recent times. Additionally, the US agency DFC earlier in December concluded that the accusations by Hindenburg on Adani Group were irrelevant, which led to Adani Ports winning a $553 million loan approval for a Sri Lankan container terminal project.

Adani Group companies have a strong pipeline in 2024.

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