Are Adani Group stocks on the road to recovery
In January this year, a damning report by Hindenburg Research sent high-riding Adani Group stocks to the trenches. After dwelling at the bottom for over a month, the conglomerate's listed companies are finally showing signs of revival. The stocks have been performing well this week, which brings us to the question - Are Adani Group stocks on the road to recovery?
Why does this story matter?
Adani stocks have been dragged through the mud since Hindenburg published the report. The US-based short-seller accused the group of accounting fraud, market manipulation using offshore shell companies, and overvaluing companies. The allegations put the conglomerate's stocks under massive selling pressure. It seemed that investors' confidence in Adani Group was at an all-time low. However, things seemed to have picked up.
Most Adani Group shares jumped on Tuesday
Recently, Adani stocks have taken a beating in the market. However, on Tuesday, eight of the company's 10 listed firms ended in the green. The flagship Adani Enterprises jumped 14.22% to Rs. 1,364.05 on BSE. Similarly, Adani Ports & SEZ, the second-most valued group stock, also saw its shares increase by 5.44%.
All listed Adani stocks rallied today
If you think Adani Group stocks' performance on Tuesday was an aberration, you are in for a surprise. All 10 Adani stocks ended in green today. The performance was led by Adani Enterprises, which rose 14.7% to Rs. 1,564.30. Adani Green Energy grew by 5%, while Adani Transmissions and Adani Total Gas saw a 4.99% jump.
Adani Group is holding roadshows to charm investors
The question is, what is driving this mood change among investors? Is it the fixed income roadshow or prepayment of debts, or something else? The group is currently holding a roadshow in Hong Kong to win back investor confidence. The two-day roadshow in Hong Kong follows a series of meetings in Singapore on February 27.
The group prepaid over $1 billion worth of loans
Hindenburg had raised questions about Adani Group's sky-high debt. To boost investor confidence, the conglomerate decided to prepay many of its debts before the stipulated date. Since Hindenburg's report, the group has prepaid $1.114 billion worth of loans. According to Bloomberg, it plans to prepay a $500 million loan to a group of banks that includes Barclays, Standard Chartered, and Deutsche Bank.
Adani group secured $3bn credit line from sovereign wealth fund
The upturn in the fortunes of the Adani Group could also be due to reports of the conglomerate securing new funding. The group reportedly secured a $3 billion loan from a sovereign wealth fund. The credit line from the sovereign wealth fund could increase to $5 billion. On top of that, the conglomerate secured another $800 million in debt funding.
