The Indian stock market has sustained its upward momentum, continuing the rally that commenced in November. With a gain of over 5 per cent last month and an additional 4 per cent in the first six trading sessions of December, one important contributor to this surge has been the resurgence of Adani Group stocks. Since the latter part of November, Gautam Adani’s conglomerate has witnessed a remarkable surge in market capitalisation, soaring by up to 48 per cent. Several of these stocks have even hit fresh 52-week highs, with Adani Total Gas emerging as a standout performer, boasting a 115 per cent increase within just nine trading sessions.
Presently, the Adani Group stocks collectively hold a market capitalisation close to ₹15 lakh crore, a significant climb from the ₹10 lakh crore mark observed in the final week of November. The impact was even visible in the bond yields, which dropped recently. Several factors have prompted this sudden bullishness. Media reports indicated that during the US International Development Finance Corp’s (DFC) due diligence investigation, prior to extending a USD 553 million loan for a container terminal in Sri Lanka, did not find relevance in short seller Hindenburg Research’s allegations of corporate fraud against the conglomerate.
Additionally, Adani Green Energy securing a substantial USD 1.36 billion loan from an international bank consortium further fuelled positive sentiments. Moreover, recently the Supreme Court concluded hearings in a regulatory probe investigating the American short seller’s allegations. While reserving its order on the probe, the apex court stated it would not take media reports on the conglomerate as the “gospel truth”. The recent majority win of the BJP-led government in three state elections also contributed to the prevailing market optimism.
This story is from the December 18, 2023 edition of Dalal Street Investment Journal.
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This story is from the December 18, 2023 edition of Dalal Street Investment Journal.
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