Shares of Adani Group companies climbed on Thursday as block trades in some of the conglomerate’s stocks suggested institutional investors were buying after a prolonged rout.
Flagship Adani Enterprises Ltd. erased an early loss of 10 percent as 36.8 million shares, equaling 3.2 percent of its equity, changed hands in two block trades. A series of block deals also punctuated early trading in other group stocks like Adani Ports and Special Economic Zone Ltd. and Adani Green Energy Ltd., according to exchange data.
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“The block deals point to some trades between foreign institutional investors or promoters because only they hold such large amounts of shares,” said Deepak Jasani, head of retail research at HDFC Securities Ltd. “In the meantime, the negative newsflow for the group has reduced and some investors may be finding valuations attractive at this point.”
All 10 Adani Group stocks closed higher on Wednesday, the first such occurrence since the explosive report by US short-seller Hindenburg Research in late January sparked an unprecedented rout in the conglomerate’s shares. They were all up again as of 11:54 a.m. in Mumbai.
Adani Enterprises surged more than 30 percent in the previous two sessions as the embattled group conducted investor meetings in Singapore and Hong Kong to shore up confidence.
Adani stocks held the advance as India’s top court on Thursday ordered setting up of a six-member panel to probe US short-seller Hindenburg’s allegations of accounting fraud against the conglomerate. It also asked the local markets regulator to investigate any manipulation in the Adani stocks and apprise the court and the expert panel of its findings within two months.
The Adani Group welcomes the order, which will “bring finality in a time bound manner,” Chairman Gautam Adani said via a Twitter post. Adani Group has repeatedly denied allegations made in Hindenburg’s report.
The Adani Group welcomes the order of the Hon'ble Supreme Court. It will bring finality in a time bound manner. Truth will prevail.— Gautam Adani (@gautam_adani) March 2, 2023
The court-appointed panel is also tasked with assessing if there has been regulatory failure in this situation and to suggest measures for strengthening regulatory framework.
The 10 companies part of billionaire Gautam Adani’s ports-to-power empire added about $9 billion in market value in the last two sessions, trimming the combined loss since Hindenburg’s January 24 report to $143 billion.
“These block deals are clear indication that institutional buyers are coming into play,” said Kishor Ostwal, CEO of Mumbai-based investment advisory firm CNI Research Ltd.
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