Mumbai: Shares of Adani Group companies rallied on Friday led by a sharp rise in flagship firm Adani Enterprises, amid positive sentiment around the conglomerate’s plans to raise up to $3 billion in new funds.
Adani Enterprises saw its stock price jump over 5% during the day’s trade after global brokerage Cantor Fitzgerald initiated coverage on the stock with an “overweight” rating and a bullish long-term outlook. Cantor analysts said Adani Enterprises is well-positioned to benefit from the strong growth opportunities in India’s infrastructure space. They believe the risk-reward at current levels is attractive for investors.
The brokerage firm’s endorsement comes at a time when reports suggest the Adani Group is in talks with global private equity players as well as major Indian banks to raise up to $3 billion in new capital over the next few months. Market participants see this as a positive sign, indicating strong investor interest in betting on the group’s ambitious expansion plans across ports, airports, power, cement and other businesses.
Gains were seen across other Adani group companies as well on hopes that the new fundraise, if successful, would boost the conglomerate’s financial flexibility to fund its capital expenditure needs and take advantage of new projects. Adani Ports jumped over 4%, while Adani Power and Adani Green Energy surged 3-4% during the day.
The positive momentum in Adani stocks comes on the back of a nearly year-long recovery from last February when a negative report by an American short seller had sparked a heavy sell-off. Most Adani group shares are still to recover fully from the losses suffered then. However, Friday’s rally indicates investor sentiment may be turning favorable again on expectations of strong growth in the coming years.
The Adani Group has moved aggressively over the past year to strengthen its corporate governance, reduce debt levels and assuage concerns around transparency and oversight. Market observers feel these actions have improved confidence among global and domestic investors about the group’s long-term outlook and ability to deliver on its ambitious business expansion plans. Should the proposed $3 billion fundraising come through successfully, it would provide an additional boost and validate the positive sentiment building around the ports-to-energy conglomerate.
In conclusion, Adani Group stocks have risen sharply over the past year as the conglomerate focuses on expanding into new sectors ranging from data centers, digital services and green hydrogen. The proposed fundraising is aimed at financing these big ticket projects and helping drive the next phase of growth for the group. A successful capital raise could reinforce confidence in the group’s strong financial position and long-term investment thesis.
