The shares of Adani Group companies have increased by $30 billion since November and this has taken the market cap of the group to more than Rs 13 lakh crore. This is a record in the equity market.
In November, the Supreme Court had said during the hearing that Hindenburg’s allegations could not be considered true. Apart from this, many such circumstances arose one after the other, due to which the interest of investors in the shares of the Group increased.
Here we discuss 5 major factors.
1) US government’s clean chit
About a month ago, US agency US International Development Finance Corp had announced a $553 million investment in Adani Ports’ terminal project in Colombo. On Tuesday, Bloomberg quoted a senior official as saying that the US government also considered Hindenburg’s allegations wrong.
2) Supreme Court’s trust on SEBI remains intact
On November 24, the Supreme Court reserved its verdict on PILs alleging contempt of court against market regulator SEBI in connection with the investigation into Hindenburg’s allegations.
During the hearing, Chief Justice DY Chandrachud emphasized that the court cannot proceed under the assumption that the allegations made in the Hindenburg report are inherently true. He said, ‘We do not need to accept the Hindenburg Report as correct. That’s why we asked SEBI to investigate. Adani Group has repeatedly said that false allegations have been made in the Hindenburg report.
3) Investment plan of Rs 7 lakh crore
Adani Group will spend Rs 7 lakh crore as capital expenditure in the next decade. The group wants to expand its infrastructure.
Group CFO Jugeshinder Singh has told in the company presentation that from power sector to airports and ports, 6 companies of Adani Group will raise funds through bond market for mega investment.
He said that these companies will raise 80% of the total funding through debt issues in the global capital market and the remaining 20% from the domestic market.
4) Foreign funding in Adani Green Energy
In one of Asia’s largest project finance deals, Adani Green Energy on Tuesday raised $1.36 billion in funding from international banks through a construction facility. This funding was part of the company’s plan to raise $3 billion.
The Senior Debt Facility is a ‘green loan’ offered by eight international banks including BNP Paribas, Co-operative Rabo Bank UA, DBS Bank, Intesa Sanpaolo SPA, MUFG Bank, Societe Generale, Standard Chartered Bank and Sumitomo Mitsui Banking Corp. is done.
According to a company statement, the amount of $1.36 billion will be used to develop ‘the world’s largest renewable energy park’ in Khavda, Gujarat. The company plans to establish renewable energy capacity of 2,167 MW here.
5) BJP’s hat-trick in assembly elections
BJP’s unprecedented victory in three of the recently held assembly elections in five states has given a huge hit to the country’s equity market, taking it to new record highs.
BJP’s victory seemed certain in Madhya Pradesh and Rajasthan, but in Chhattisgarh, where there was no anti-incumbency wave and BJP was likely to finish second, the party surprised by winning there also. The recent victory has largely removed the concerns about BJP’s performance in the Lok Sabha elections.
Analysts have said that investors waiting for clarity can start investing money. In the last week alone, the benchmark Nifty 50 has increased by about 800 points or 4%.
There is a possibility of BJP’s victory in the general elections next year and it is being considered as a positive sign especially in the field of infrastructure development.
