Adani Group Stocks Crash 13%, Wiping Out Rs 90,000 Crore in Market Cap

In a dramatic turn of events, the Adani Group stocks witnessed a precipitous fall on Wed, March 13th, 2024. The sell-off intensified as the trading session progressed, with all 10 Adani counters trading deep in the reds, erasing a staggering Rs 90,000 crore from their combined market capitalization by noon.

The Biggest Casualty?

Adani Green Energy emerged as the biggest casualty, plunging a whopping 13% to an intraday low of Rs 1,650 per share on the National Stock Exchange (NSE). This marked the largest single-day drop for the renewable energy company's shares in 2024 so far.

Flagship Stocks Battered

The group's flagship entities, Adani Enterprises and Adani Ports & SEZ, both constituents of the prestigious Nifty index, were not spared either. Adani Enterprises shares extended their decline for the seventh consecutive day, trading 5.5% lower, despite being nearly 100% higher than its 52-week low of Rs 1,573. Adani Ports & SEZ, meanwhile, shed 5.3% of its value.

The cement arm of the Adani empire also suffered substantial losses, with ACC and Ambuja Cements trading 4.3% and 2.9% lower, respectively. Adani Energy Solutions, Adani Power, Adani Total Gas, NDTV, and Adani Wilmar all witnessed declines ranging from 4% to 7%.

Decline of Market Capitalization

The widespread sell-off resulted in a staggering Rs 90,000 crore erosion in the Adani Group's combined market capitalization. This figure represents a significant 5.7% of the group's overall market cap, which stood at nearly Rs 15.85 lakh crore as of the previous market closing on Tuesday, March 12, 2024

On a broader market scale, the Adani Group's woes were further compounded by the broader market sentiments, with the benchmark Sensex and Nifty 50 indices both shedding around 1%. The midcap and smallcap indices bore the brunt of the selling pressure, declining by a substantial 3%-4%.

Contrasting Brokerage Calls

Despite the steep decline in Adani Group stocks, some brokerage firms maintained a bullish stance on key entities within the conglomerate. HSBC and Motilal Oswal raised their target prices for Adani Ports, citing the potential for the company to exceed its cargo volume forecast for the fiscal year, based on favorable February data.

Also, Jefferies initiated coverage on Adani Enterprises with a "buy" recommendation, projecting a significant increase in EBITDA to Rs 21,449 crore by FY26. The firm set an ambitious target price of Rs 3,800, highlighting the anticipated impact of the Navi Mumbai Airport launch and the group's foray into green hydrogen manufacturing as catalysts for growth.

Investor Concerns Mount

The sharp decline in Adani Group stocks has raised concerns among investors, who are closely monitoring the situation. The group has been grappling with various challenges, including allegations of stock manipulation and accounting irregularities, which have weighed heavily on investor sentiment.

As the market closes, all eyes will be on the Adani Group's management and its response to the ongoing crisis. The coming days will be vital in determining whether the group can regain investor confidence and control the selling pressure wave.