Shares of two Adani Group companies — Adani Transmission and Adani Green Energy — fell sharply to hit their lower price bands in Monday’s trade. The weakness in a majority of Adani stocks came after it was reported that market regulator SEBI is probing possible violation of ‘related party’ transaction rules in the energy-to-ports conglomerate’s dealings.
News agency Reuters, citing sources, said the three entities allegedly entered into several investment transactions with unlisted units of the Indian conglomerate founded by billionaire Gautam Adani over the last 13 years.
Vinod Adani, Gautam Adani’s brother, is either a beneficial owner or director who has links with those three offshore entities, the report stated. Securities and Exchange Board of India (SEBI) is probing if the lack of that disclosure violated ‘related party transaction’ rules, it added.
Shares of Adani Transmission fell 5 per cent to hit a day low of Rs 948.05 over its previous close of Rs 997.90. In a year, the stock has lost 61.34 per cent so far this year in the aftermath of a scathing report by US-based short seller Hindenburg Research. Hindenburg’s report alleged stock manipulation and improper use of tax havens, and flagged debt concerns. Adani Group, however, strongly refuted the claims.
“Adani Transmission looks bearish with strong support now at Rs 906 on the daily charts. A daily close above resistance of Rs 1,168 can be used to buy for a target of Rs 1,478 in the near term,” said AR Ramachandran from Tips2trades.
The stock was last seen higher trading than the 20-day moving averages but lower than the 5-day, 50-, 100- and 200-day moving averages. The counter’s 14-day relative strength index (RSI) came at 41.47. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company’s stock has a price-to-equity (P/E) ratio of 812.28.
That said, the scrip has an average target price of Rs 4,172, Trendlyne data showed, suggesting a potential upside of 342.23 per cent. It has a one-year beta of 1.33, indicating high volatility on the counter.
In the case of Adani Green Energy, the shares plunged in the same quantum (5 per cent) to hit a lower circuit level of Rs 837.80. The counter has lost 55.65 per cent on a year-to-date (YTD) basis.
“Adani Green looks bearish with strong support now at Rs 775 on the daily charts. A daily close above resistance of Rs 936 can be used to buy for a target of Rs 1,100 in the near term,” Tips2trades’ Ramachandran.
The stock was last seen trading higher than the 20-day moving averages but lower than the 5-day, 50-, 100- and 200-day moving averages. The counter’s 14-day RSI came at 44.52. The company’s stock has a negative P/E ratio of 684.74.
The scrip has an average target price of Rs 3,581, as per Trendlyne, suggesting a potential upside of 327.79 per cent. It has a one-year beta of 1.10, indicating high volatility.
Both Adani Transmission and Adani Green extended their fall for the fifth straight day.
Meanwhile, Indian equity benchmarks traded lower in late deals amid a highly volatile session, led by gains in automobile, banks, financials and consumer durable stocks.
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