Adani Ports and Special Economic Zone (APSEZ) on Monday fell sharply as a rout in its shares continued. The stock slipped 5.25 per cent to settle at Rs 553.20 over its previous close of Rs 583.85. The company reported a 16 per cent decline in its net profit at Rs 1,315 crore during the December 2022 quarter (Q3 FY23). The profit came at Rs 1,567 crore in the corresponding period a year ago. The company’s net gross debt stood at┬аRs 45,534 crore in Q3, up 6.51 per cent sequentially.┬а
The stock traded lower than 5-day, 20-, 50-, 100- and 200-day moving averages. The counter’s 14-day relative strength index (RSI) came at 34.13. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company’s stock has a negative price-to-equity (P/E) ratio of 99.01.
Support on the counter could be seen at Rs 477, a technical analyst said. “Adani Ports has strong resistance at Rs 605 on the daily charts. A close above this level could lead to targets of Rs 649-699 in the near term. Support will be at Rs 477,” said AR Ramachandran from Tips2trades.
All the 10 listed Adani Group stocks plunged today with the group’s flagship firm Adani Enterprises down 7.03 per cent. Adani Wilmar, Adani Total Gas, Adani Green Energy, Adani Transmission, Adani Power and NDTV closed at their respective lower price bands.
Here’s what could be hurting Adani Group shares:
SEBI probe
The Securities and Exchange Board of India (SEBI) has been probing Adani Group’s market rout, including examining trade patterns and potential irregularities in the Rs 20,000 core share sale (now shelved) of flagship company Adani Enterprises.
The market regulator may brief finance ministry officials on February 15 on its investigation into the shelved share sale, sources told news agency Reuters. SEBI and the finance ministry, however, didn’t release any official comment yet.
Finance Ministry on insurance companies’ holdings in Adani Group
Public sector general insurance companies like New India, United India, National Insurance, Oriental Insurance and General Insurance Corporation Re have Rs 348-crore exposure in Adani Group companies, the finance ministry told Parliament in a reply. This represents 0.14 per cent of their total assets under management (AUM), said the ministry. Life Insurance Corporation of India’s (LIC’s) exposure in the Adani Group is 0.975 per cent of the insurance giant’s AUM, it added.┬а
Moody’s outlook
Last week, Moody’s negative outlook on four of the conglomerate’s listed and unlisted firms. Moody’s downgraded its ratings for Adani Green Energy; the Adani Green Energy Restricted Group, which represents some of its other units; and two subsidiaries of Adani Transmission. The development came after Morgan Stanley Capital International (MSCI) reassessed the size of some Adani companies’ free floats.
Adani firms pledge more shares
Three Adani Group companies have pledged additional shares for the State Bank of India (SBI). Adani Ports, Adani Transmission Ltd and Adani Green Energy pledged shares to SBICAP Trustee Company, a unit of India’s biggest lender, SBI.
As many as 75 lakh more shares of APSEZ have been pledged, taking the total to 1 per cent of all shares with SBICAP. In the case of Adani Green, a pledge of 60 lakh more shares took the total to 1.06 per cent. A pledge of 13 lakh more shares of Adani Transmission took the total to 0.55 per cent, the exchange filings showed.
The additional pledges are part of a $300 million letter of credit — issued by a bank to another bank as a guarantee for payments made — provided by SBI for Adani Group’s Carmichael coal mining project in Australia.
NSE’s ASM framework
Two stocks — Adani Ports and Ambuja Cements — were in focus today after their exit from NSE’s ASM framework. In a separate development, Asia Index has said that Adani Wilmar would be dropped from the S&P BSE IPO index. The reconstitution would be effective February 20, 2023.
Today, Adani Group told Reuters that the balance sheet of each of its companies was “very healthy”.
Since January 24, all listed Adani stocks took a major hit after US-based short seller Hindenburg Research alleged that the Indian conglomerate had engaged in stock manipulation and accounting fraud scheme over the last few decades. Adani Group, however, refuted the claim as baseless.
Meanwhile, Indian equity benchmarks settled lower today, dragged by banks, financial, technology, metals, consumer durables and energy stocks. The 30-share BSE Sensex pack fell 251 points or 0.41 per cent to settle at 60,432; while the broader NSE Nifty index moved 86 points or 0.48 per cent lower to finish at 17,771.
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