Most shares of companies in Adani Group rose Wednesday, continuing a rebound in the Indian conglomerate’s combined market value after a plummet in its stock prices over the past two weeks.
Shares of five of the seven companies named after Indian billionaire
climbed, with the flagship
ending the day up around 20%. The rally brought the market value of the seven companies to $112 billion, up from the $105 billion it hit Monday. The valuation is still down 48% from levels reached before U.S. short seller Hindenburg Research published a scathing report on the conglomerate on Jan. 24 .
The report alleged stock-price manipulation, among other things. The ensuing slump in share prices led Adani Group to publish a 413-page rebuttal to deny the allegations and pushed Adani Enterprises to scrap a planned $2.5 billion secondary share sale.
The rally in shares of companies in Adani Group this week was partly prompted by the controlling shareholders’ promise to repay a $1.1 billion loan that was backed by shares, as well as some upbeat reactions to results from Adani-linked companies this week, analysts said. Short sellers might also have taken a breather after a slide in the stock prices.
“The short sellers have probably moved away from the market and that’s basically helped the stock prices to recover. Buyers normally want to see stability in the price…and you’re seeing the buying in the stocks now,” said
managing director at KRChoksey Holdings in Mumbai.
The selloff caught the attention of foreign investors. On Tuesday, Nomura Holdings Inc.’s asset-management unit published the names of its 30 publicly offered investment trusts that hold either Adani-linked stocks or bonds. “We will continue to pay close attention to news and market trends related to the Adani Group,” Nomura said.
Nomura didn’t immediately respond to a request for comment.
Several companies owned by Adani Group are reporting earnings this week, although Adani Enterprises isn’t due to release its results until next Tuesday.
Adani Power Ltd.
on Wednesday said its consolidated net profit fell 96% to the equivalent of around $1.1 million in the quarter ended in December, as higher fuel costs ate into earnings. Food maker
Adani Wilmar Ltd.
reported that its profit rose 16.4% to the equivalent of about $29.7 million over the same period.
Earlier in the week,
Adani Transmission Ltd.
Adani Green Energy Ltd.
Ambuja Cements Ltd.
all posted net profit increases during the October-to-December quarter, while
Adani Ports & Special Economic Zone
New Delhi Television Ltd.
, a major Indian broadcaster that is largely owned by 60-year-old industrialist Mr. Adani, said profits were down.
In its latest results, Adani Ports said it would pay off about $604.2 million worth of debt starting April.
The rebound in the shares of companies in Adani Group follows a similar rally in their bond prices. Bonds issued by two of the conglomerate’s subsidiaries have retraced around half the losses they sustained in the wake of the Hindenburg report, partly a result of distressed-debt funds buying the bonds at the end of last week.
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