Adani Group stocks start picking up again

Billionaire businessman Gautam Adani’s net worth is beginning to climb once again with all Adani Group stocks trading in green today. The biggest gain was for Adani Enterprises, which had hit headlines after its Rs 20,000 crore follow on public offer was withdrawn.

Gautam Adani, Chairman of the group and his family have repaid Rs 9,250 crore ($1.1 billion) of debt backed by shares ahead of its repayment schedule in September 2024. The group announced the decision on Monday saying that it was being done in the light of market volatility. The move is expected to soothe the investors’ nerves.

Besides in a report, CSLA Ltd which focuses on capital markets noted that that the country’s banking sector’s exposure to the group is less than 40 per cent of total debt of the group. The group’s exposure in private banks’ is below 10 per cent of total group debt. The report also noted that it had largely financed assets with strong cash flows such as airports and ports.

The debt levels of the Adani Group are currently at Rs 2 lakh crore, double of what it was three years ago. Its bank debt rose more than 25 percent, the report said.

Adani’s businesses are spread across sectors, from mines, ports, airports, power plants, media, renewable energy among others.

Recently, Adani Group had also finalized the takeover of the of Haifa Port in Israel for $1.15 billion. The port, which handles about 20 million tons of cargo pass through annually, is strategically located. The move will allow Adani to set foot in the European port sector while tapping the Mediterranean region.

Many questions came up when Adani decided to suddenly withdraw its fully subscribed FPO. The move further dampened market sentiments.

“It was a gamble..he tried to take a moral high ground,” an analyst said.

In 2023, the foreign institutional investors (FIIs) have already pulled out $3.8 billion from the Indian equity markets.

However, on February 4, the Securities Exchange Board of India (SEBI) in a statement said, “The Indian financial market as represented by Sensex and Nifty has demonstrated ongoing stability and is continuing to function in a transparent, fair and efficient manner.”

FIIs inflow in turn have increased into the Chinese markets.

Will Indian markets overcome the current tide?

The analyst said that while the jury is out, the Indian stock market today is dominated by the domestic institutional investors (DIIs) which include the mutual funds and local pension funds among others. “The dependence on FIIs is limited unlike a decade ago when FIIs pulling out meant a stock market crash,” he said.

Anand Mahindra, Mahindra Group Chairman earlier took to Twitter and took a direct dig at the global media. “Global media is speculating whether current challenges in the business sector will trip India’s ambitions to be a global economic force,” he said. “I’ve lived long enough to see us face earthquakes, droughts, recessions, wars, terror attacks. All I will say is: never, ever bet against India,” Mahindra said.

Also read: Adani Enterprises withdraws its Rs 20,000 crore FPO