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Adani Enterprises Shares Drop 8% as Traders Book Profit; What Should you Do Now?

Adani Enterprises Share Price: The three-day rally in Adani Enterprises on Wednesday came to an abrupt halt as the Nifty stock lost up to 8% to hit day’s low of Rs 2425.85 on BSE as traders booked profits.

Shares of Adani Enterprises rose over 45 per cent to Rs 2751.25 on Wednesday from Rs 1,890-level on Friday, May 19. However, the stock dropped about 8 per cent on the profit booking to Rs 2425.85 during the session. The total market capitalization of Gautam Adani’s flagship tumbled to Rs 2.80 lakh crore from Rs 3.15 lakh crore a day earlier.

At a market capitalisation of Rs 2.8 lakh crore, Adani Enterprises is the most valued stock in the Ahmedabad-based conglomerate’s family of ten listed companies.

Amid a spate of positive news flow which began with the Supreme Court-appointed committee’s report on Hindenburg claims, the stock rallied 39% in just three days before today’s fall.

Meanwhile, veteran investor Rajiv Jain’s GQG Partners LLC has increased its stake in billionaire Gautam Adani’s conglomerate by about 10 per cent. As media reports suggested, the US-based investment firm will also take part in the conglomerate’s future fundraising, doubling down on what he calls “the best infrastructure assets available in India.”

In March, GQG acquired almost Rs 15,446 crore investment into four Adani Group companies. The value of this investment now stands at around Rs 25,515 crore, up by a staggering Rs 10,069 crore, driven by a sharp rally in Adani group stocks. This means Jain’s investment into four Adani Group companies in March has generated more than 65 per cent returns in less than three months.

How Are Other Adani Group Share Performing Today?

Adani Ports share price fell about 2 per cent, ACC share price fell over a per cent while Ambuja Cements share price fell almost a per cent.

On the other hand, Adani Power share price rose nearly 5 per cent. Stocks such as Adani Transmission opened at a 5 per cent upper circuit of Rs 909.90, Adani Green Energy share price opened higher and soon hit its 5 per cent upper price band of Rs 1,038.95. Adani Total Gas share price opened at a 5 per cent upper circuit of Rs 795.25 and NDTV share price, too, opened at a 5 per cent upper circuit at Rs 205.50.

What Analysts Say?

After the stellar gains of the last few days, analysts were expecting some profit booking in Adani stocks as they point out that the valuations are still on the higher side.

“Adani stocks had corrected hugely after the Hindenburg report. The high integrity of the members of the Supreme Court panel must have given confidence to investors to buy the beaten-down stocks. Some short covering also would have contributed to the rally. However, from the valuation perspective, Adani stocks are not undervalued,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

We are going to see a huge number of institutional investors coming in buying these stocks because the clouds of uncertainty around stocks have been cleared. At the same time, valuations are also good. They have access to growth capital. The group has emerged stronger, said Vinit Bolinjkar, Head of Research at Ventura Securities.

“Adani Enterprises has prioritized asset allocation. With their impending IPO, the green energy business will get wings. That is not discounted in valuations. I will not be surprised if analysts give a target of Rs 4,000 to Adani Enterprises,” he added.

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