Adani Group Stocks: Recovery Amid Sharp Volatility After $27 Billion Rout

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Adani Group Stocks: Recovery Amid Sharp Volatility After $27 Billion Rout

Adani Group stocks witnessed significant fluctuations in Friday’s trading session, rebounding after a $27 billion rout on Thursday.

November 22nd, 2024 News

Adani Group stocks witnessed significant fluctuations in Friday’s trading session, rebounding after a $27 billion rout on Thursday. Despite the turbulence, 10 out of 11 group companies managed to turn positive, showing signs of recovery after a tough start to the day.

Key Developments

Early Losses and Recovery:
- Adani Enterprises fell by as much as 7% in early trade but has now erased all losses, showcasing a 6% recovery from its intraday lows.
- Adani Ports, which dropped 6% initially, gained momentum to recover 4% and turned positive.
- Other key players, including Adani Green Energy, Adani Energy Solutions, and Adani Power, also recovered 3%-5% from their respective lows.
F&O Ban on Adani Enterprises:
Adani Enterprises remains in the Futures and Options (F&O) ban, limiting the creation of new positions. Existing positions, however, can still be adjusted.
- A stock enters the F&O ban when the total open interest of contracts surpasses 95% of the Market Wide Position Limit (MWPL), as defined by the exchange.
Impact of External Factors:
- Kenyan Government’s Contract Cancellation: The cancellation of $2.6 billion worth of potential contracts by Kenya—covering the management of Nairobi Airport and construction of high-voltage power transmission lines—fueled uncertainty for Adani Group.
- S&P Downgrade: Ratings agency S&P revised its outlook to negative for Adani Ports, Adani Electricity, and a unit of Adani Green Energy following the US indictment of Gautam Adani and other executives.
  - S&P noted that recent developments could restrict funding access for Adani Group companies.
Overall Market Impact:
- The group had ₹2.3 lakh crore wiped out in market capitalization on Thursday, adding to concerns over the group's stability amid global scrutiny.

Stock Performance Summary

Adani Group Stocks	Intraday Fall	Recovery
Adani Enterprises	-7%	6%
Adani Ports	-6%	4%
Adani Green Energy	-11%	5%
Adani Energy Solutions	-9%	3%
Adani Power	-7%	5%

Conclusion

Adani Group’s stock performance reflects continued volatility, triggered by a mix of external pressures and regulatory scrutiny. While most stocks rebounded from their intraday lows, the overarching challenges, including funding access and geopolitical factors, may keep the group under market watch. Investors are advised to stay cautious amid evolving developments.