Remember when Gautam Adani lost his place from the top 20 billionaires list? Well, the business tycoon has reentered the list, placed at the 18th spot in the Bloomberg Billionaires Index. All because of the last five trading sessions that grew his wealth to USD 64.2 billion i.e., a surge of USD 4.38 billion.
Remember that prior to the Hindenburg debacle, the chairman of Adani Group was worth USD 120 billion. Owing to the last five volatile yet eventful sessions, the billionaire has managed to reach 50 percent of his previous valuation.
The question is – what led to these massive fluctuations? Will this bullish sentiment continue?
For that, let’s dive a bit into the Supreme Court verdict along with scrutinising the past five trading sessions i.e., from May 19 to 25, 2023.
Adani Group stocks rose by Rs. 63,418 crore in a single day
Adani Group stocks 5-day performance
Being a conglomerate, Adani Group comprises subsidiaries including Adani Transmission, Adani Enterprises, Adani Green Energy and Adani Wilmar. Prior to the Adani-Hindenburg row, Adani Group stocks enjoyed a total valuation of Rs. 19.20 lakh crore, as of January 24, 2023.
What is the Hindenburg Research report?
For those living under a rock, a US-based organisation Hindenburg released a research report in January 2023, accusing the Indian conglomerate of:
- Large-scale market manipulation
- Overinflating value of assets
- Controlling 75 percent of shares through offshore shell companies
To say that these allegations created a whirlwind in Dalal Street, is an understatement.
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Aftermath of Adani Hindenburg row
After the release of the Hindenburg report, Adani Group stocks witnessed a massive sell-off by contemplating investors, leading to a gigantic loss of USD 56.4 billion. This also led to Adani losing his spot as ‘India’s richest billionaire’ and even went down on the Bloomberg Billionaires Index.
On the back of Hindenburg’s allegations, the Securities and Exchange Board of India (SEBI) placed an Additional Surveillance Measure (ASM) on several Adani Group stocks including
- NDTV
- Adani Enterprises
- Adani Power
- Adani Wilmar
- Adani Green Energy
These stocks, however, were later on removed from the ASM framework.
Recently, however, both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) recently placed Adani Enterprises shares under short-term ASM surveillance. The exact reason however, is yet to be ascertained.
Adani group stocks rally on Dalal Street
Almost four months after the Adani-Hindenburg incident, stocks are back in action, with a record surge of Rs. 63,418.85 crore, in a single day, on May 23, 2023. Even on May 24, 2023, the stocks witnessed an Rs. 10.16 lakh crore jump in valuation.
Here’s a look at how the top 4 Adani group stocks performed this week:
| Adani Group Stock | Gain/Loss Today (as of 1:00 pm, May 25, 2023) | 5-Day Gain/Loss | 1-Month Gain/Loss |
| Adani Enterprises | -1.28% | +28.84% | +32.48% |
| Adani Wilmar | -3.97% | +19.48% | +10.55% |
| Adani Transmission | -3.54% | +21.73% | -13.21% |
| Adani Green Energy | -2.45% | +15.70% | +3.11% |
Clearly, all four stocks witnessed a massive surge in the trading week ending on May 25, 2023, as opposed to the entire month. Adani Enterprises, for instance, gained 28.84 percent this week, while Adani Transmission jumped 21.73 percent.
As reiterated below, major gains happened in three trading sessions – May 22, 23 and 24, 2023. We aren’t claiming this. It’s all in the price fluctuations.
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Adani Enterprises’ share price fluctuations
Upper circuit – Rs. 2724.55
Lower circuit – Rs. 2229.25
| Trading Session | Opening Value | Closing Value |
| 19 May | Rs. 1,889.75 | Rs. 1,955.00 |
| 22 May | Rs. 1,896.75 | Rs. 2,338.55 |
| 23 May | Rs. 2,558.70 | Rs. 2,639.95 |
| 24 May | Rs. 2,597.70 | Rs. 2,475.00 |
| 25 May | Rs.2,482.90 | Rs.2548.00 |
Look closely – on Monday, May 22, 2023, Adani Enterprise share price was well-below its lower circuit i.e., no buyers, just sellers. However, as May 23 approached, the scene shifted as more traders wanted to buy the stock.
Not to mention, the stock price witnessed a massive surge in those two days.
Adani Wilmar share price fluctuations
Upper circuit – Rs. 487.50
Lower circuit – Rs. 441.10
| Trading Session | Opening Value | Closing Value |
| 19 May | Rs. 373.15 | Rs. 403.95 |
| 22 May | Rs. 432.05 | Rs. 444.30 |
| 23 May | Rs. 488.70 | Rs. 488.70 |
| 24 May | Rs. 488.00 | Rs. 464.30 |
| 25 May | Rs. 455.80 | Rs.452 |
In the case of Adani Wilmar, the share price was already well-below its lower circuit. No buyers for the stock. But on May 23, the scene shifted entirely, so much so that the stock reached its upper circuit – more buyers. Again, a rally in stock price.
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Adani Transmission share price fluctuation
Upper circuit – Rs. 956.95
Lower circuit – Rs. 865.85
| Trading Session | Opening Value | Closing Value |
| 19 May | Rs. 722.20 | Rs. 789.15 |
| 22 May | Rs. 826.70 | Rs. 826.70 |
| 23 May | Rs. 868 | Rs. 868 |
| 24 May | Rs. 911.40 | Rs. 911.40 |
| 25 May | Rs. 916.75 | Rs.893 |
Adani Transmission had a slightly different price movement compared to Adani Wilmar and Adani Transmission. Undeniably, there was an increase in the stock price. However, the value remained well below the stock’s lower circuit. Not many wished to buy the stock.
You may find it odd. But remember, Adani Transmission’s share price grew 21.73 percent in the last five sessions. And this kind of surge is usually followed by a fall in price. So probably, traders were waiting for a lower price to buy.
Adani Green Energy share price fluctuation
Upper circuit – Rs. 1033.45
Lower circuit – Rs. 935.05
| Trading Session | Opening Value | Closing Value |
| 19 May | Rs. 829.80 | Rs. 903.55 |
| 22 May | Rs. 941.75 | Rs. 941.75 |
| 23 May | Rs. 988.80 | Rs. 988.80 |
| 24 May | Rs. 1,026.00 | Rs. 984.40 |
| 25 May | Rs. 976.55 | Rs.971.20 |
Adani Green Energy faced a trend similar to Adani Transmission. Even then, however, the price surged from Rs.829.80 last week to Rs.1,026 on May 24, 2023, a jump that surely took Dalal Street by surprise.
Now, the question of the hour:
Why were Adani Group stocks soaring?
This week, the Supreme Court of India-appointed panel gave a clean chit to the Adani Group in the allegations made by the Hindenburg Research report. In fact, the panel found no evidence of stock price manipulation, at least in the initial investigation.
…at this stage, taking into account the explanations provided by Sebi, supported by empirical data, prima facie, it would not be possible for the committee to conclude that there has been a regulatory failure around the allegation of price manipulation.
Supreme Court expert panel
In contrast, however, the panel found increased build-up in short positions on Adani Group stocks ahead of the release of the Hindenburg report.
This clean chit by the apex court was enough to reinstate confidence in investors to purchase Adani Group stocks, leading to a successful rally this week.
The second confidence aspect came from the investment firm GQG Partners. According to a report by the Economic Times, the company is planning to invest another USD 1 billion in the Adani Group, having received “bumper returns” on the existing investment in the conglomerate.
Currently, the group owns approx. USD 2 billion stakes in the conglomerate.
What Dalal Street wonders, however, is whether these soaring stock prices will continue? Or is this just a short-term movement?
If they continue, Gautam Adani might win his No. 2 spot back! Or at least grow higher in the list.
