- by Garima Mohta
- 07th Sep 2020
Adani Group Stock To Rally Up To 70%, Various Reasons Driving Them:
Owner of Adani group subsidiaries' shares Billionaire Gautam Adani has seen a stellar rally by the 70% jump in Adani Enterprises to 68% jump in Adani Green which has been led by the group’s recent acquisitions, business developments, fundraising plans and investors' betting on the long term prospects.
All of the five subsidiaries which have made news on the back of business developments is operated by the Adani Group.
*Reasons why Adani subsidiaries’ have witnessed this surge: *
With the support of Adani's recent acquisition of Mumbai International airport from GVK group Adani Enterprises shares have multiplied investors' wealth with one stock surging nearly 70% in the last month.
Adani’s aviation bet will strengthen their position since Mumbai's CSIA, one of the top five global metropolitan centres and the airport is expected to become the nations leading international and domestic airport. The company has also achieved "financial closure of the Navi Mumbai International Airport project at the earliest to commence construction." Its subsidiary Adani Airport Holdings also bagged the bid to run six Airport Authority of India-built non-metro airports in six cities namely: Lucknow, Jaipur, Guwahati, Ahmedabad, Thiruvananthapuram, and Mangalore.
As investors pin the hopes of the company's long term prospects Adani Green shares gained over 68% in the past one month.
According to Mercom Capital, being the largest solar power generation company in the world Adani’s renewable energy portfolio exceeds the total capacity installed by the entire United States solar industry in 2019 and will displace over 1.4 billion tons of carbon dioxide over the life of its assets.
Not only this but Adani Green is yet to raise $1.35 billion to fund four construction project over the next couple of years. The company has already begun discussions with lenders such as Standard Chartered Bank, JPMorgan, MUFG, Barclays, DBS Barclays, DBS Bank, Qatar National Bank and others.
With the gain of 23% in the past month Adani Gas' CEO Suresh Manglani that along with the French energy giant Total SA, they would soon be seeking government nod to open retail fuel stations in India.
Manglani told investors on a conference call that
Total Adani Fuels Marketing will short apply for a license under the new liberal fuel retaining rules.
According to the ICICI Direct report, Adani Gas’ gross margins in the first quarter were at 19/scm YoY as the company benefited from low spot LNG prices. ICICI Direct maintains a positive outlook on the stock from a long term perspective “as AGL is well poised to benefit from India’s growing CGD sector.”
Adani Ports and SEZ:
On August 30, The Adani Ports and Special Economic zone promoters also pledged 206.09 lakh shares in favour of Credit Suisse AG to raise ₹430 crores for a group company.
Earlier on August 11, the board of the company approved a proposal to raise up to ₹3,000 crores through non-convertible debentures. NCDs are used by companies to raise long-term capital, which gets listed on stock exchanged but can't be converted into shares or equities. It also decided to list $750 million foreign currency bonds on India International Exchange. The company said the bonds would be listed on India INX’s Global Securities Market which is a pathway between Global, Indian and foreign investors.
Adani Power shares climbed 10% — relief coming in due to the Supreme court decision on compensatory tariff. On August 31, the Supreme Court directed three Rajasthan power distribution companies to pay compensatory tariff amounting to ₹5000 crore to Adani Power. The tariff to be calculated from 2013 and the courts has directed the discom to pay the money within 2 months of judgement.