Adani Power, Adani Transmission, Adani Green shares drag BSE Power index 25% lower in 1 month. What’s next?

By admin On Feb 23, 2023

After gaining more than 125 per cent in the past three years till December 2022, the BSE Power index came under severe pressure in the past one month due to heavy selling in the Adani group of stocks since January 24. Adani Green Energy, Adani Transmission and Adani Power together hold over 25 per cent weightage in the power index.

With a fall of 71.82 per cent, Adani Green Energy emerged as the biggest loser in the index. Shares of the company tanked to Rs 539.30 on February 22, 2023, from Rs 1913.55 on January 24. Adani Transmission (down 71.38 per cent) and Adani Power (down 40.83 per cent) also underperformed the benchmark power index.

The BSE Power index has cracked 25.26 per cent, or 1,127.86 points, to 3,338.02 on February 22, 2023, from Rs 4465.88 on January 24, 2023. JSW Energy and NHPC also declined 11.12 per cent and 10.92 per cent, respectively, during the same period. Power Grid Corporation of India and Tata Power Company also declined marginally by 2.90 per cent and 1.75 per cent.

Deepak Jasani, Head of Retail Research, HDFC Securities said, “Power index has dropped this year mainly because of three Adani group companies. Adani Power, Adani Transmission and Adani Green Energy which are part of the BSE Power index have seen a sizeable fall on a year-to-date basis.”

On the other hand, ABB India, Siemens, CG Power and Industrial Solutions and NTPC gained between 2 per cent and 8 per cent during the same period.

Going ahead, Pankaj Pandey, Head-Research, ICICIdirect said, “We believe integrated incumbent players who have decent coal projects base, strong balance sheet and project execution strength are rapidly diversifying into the alternate energy value chain be it renewables, green hydrogen and nuclear will be future winners. NTPC is our top pick in the power space.”

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