Adani Group stocks nosedived up to 18 percent on June 4, taking a significant hit after experiencing substantial gains in the last couple of trading sessions.
The sudden drop appears to be driven by the unwinding of speculative positions as investors take profits or reduce their exposure. The sharp correction led to Adani Group’s market capitalisation eroding by over Rs 2.3 lakh crore.
In the previous session, the conglomerate’s stocks gained, adding Rs 1.4 lakh crore to the total market value of nearly Rs 20 lakh crore.
In morning deals, Adani Total Gas was the top loser, falling nearly 18 percent. Adani Energy Solutions slumped 12 percent, Adani Power fell over 10 percent, Adani Green Energy was down 7 percent, and Adani Enterprises also fell 7 percent.
Adani Ports and SEZ tanked 8 percent, Adani Wilmar dropped 8.5 percent, Ambuja Cement slipped 9.6 percent, ACC tanked 9 percent, and NDTV was down 12 percent.
Adani Group stocks had been on a stellar run following robust earnings for the fiscal year ending March 2024, with the group’s EBITDA surging 40 percent year-on-year to Rs 66,000 crore.
The group’s market cap was hit by the Hindenburg report in late FY23. During FY24, the group focused on reducing debt and share pledges. Total group EBITDA grew 40 percent YoY in FY24, with the group raising fresh funds and the promoters increasing their stakes.
Adani Group is now eyeing $90 billion in capital expenditure over the next decade. Other group companies saw EBITDA growth ranging from 16-33 percent, except Adani Wilmar, which experienced a decline. The group’s net debt stayed steady at Rs 2.2 lakh crore in FY24.
There was a significant improvement in the net debt/EBITDA ratio, decreasing to 3.3x in FY24 from around 5x the previous year.
Adani Ports and Adani Power observed a reduction in net debt during FY24. However, Adani Enterprises and Adani Green experienced increased leverage due to new capital expenditure projects.
