Why Adani Group Shares are Falling in March 2024

This week was pure chaos in the Indian stock markets.

The market regulator dropped a bombshell on Monday, 11 March 2024, and fear gripped on Dalal Street.

Madhabi Puri Buch, the chairperson of the Securities and Exchange Board of India (SEBI), highlighted concerns regarding stretched valuations observed in both small-cap and mid-cap stocks.

We wrote a detailed editorial explaining the reasons behind the fall and what you could expect from your smallcap stocks going forward.

Adding to the top losers list, the Adani group pack was also not spared.

In fact, all the Adani group stocks crashed with Adani Enterprises and Adani Ports among the top losers.

Adani Group Stocks Performance on 13 March 2024

So, the question is, why are Adani group stocks falling all of a sudden?

Let's find out...

#1 Panic Selling

The obvious reason could be panic selling.

Panic selling occurs when a large number of investors sell their assets quickly due to fear or uncertainty, often in response to a sudden market decline or negative news.

This rapid selling can drive prices down further, creating a self-perpetuating cycle of fear and loss.

The same appears to be happening in Adani group stocks.

Despite some group companies announcing news about fundraising and high growth projections, Adani stocks have been taken to the cleaners today.

In fact, Adani Enterprises has now fallen for more than seven consecutive sessions.

#2 Rumours About Bonds

The other reason why Adani group stocks could be falling is due to rumours going around about the group purchasing electoral bonds.

We don't know for sure whether this is true or not... we'll get to the crux of matter in the next couple of days.

But after SBI submitted the details of electoral bonds to the election commission of India, rumours have been going on X (formerly Twitter) that Adani purchasing large electoral bonds was to benefit the current governing party.

We don't track all these details closely... and as we said, we'll get to the crux of the matter in the next few days.

But these two reasons have primarily sent Adani stocks falling in the past two trading sessions.

What Next?

Just when Adani group stocks were coming in their 'sweet spot', the overall fall in Indian markets has caused Adani stocks to fall.

Earlier this month, it was reported that the Adani Group is in advanced discussions with prominent sovereign funds to secure a huge funding.

This potential move to raise funds is part of the conglomerate's expansion plans for airport infrastructure and green hydrogen projects.

Adani Green Energy recently disclosed that the Adani Green Energy (UP), Parampujya Solar Energy and Prayatna Developers, have raised US$ 409 million by allotment of US dollar denominated senior secured notes.

The group has recently seen rating upgrades for several of its companies by global rating agencies like Moody's and S&P.

Reportedly, these agencies have not only reaffirmed ratings for all Adani group companies but have also restored a 'stable outlook' for five entities.

The group's ambitious expansion plans hinge on successful execution and navigating a competitive landscape.

From pioneering investments in a green hydrogen ecosystem to expanding energy capacities and embracing sustainable practices, the conglomerate is poised for transformative growth.

The group has also set an ambitious aim to achieve an EBITDA of Rs 900 bn within the next 2-3 years.

It remains to be seen how the situation unfolds as more developments pour in about Adani companies.

Till then, you can refer our recent articles on Adani group stocks.

• Is Adani the New Reliance?
• The Indian Aviation Industry is Booming and this Adani Stock Could be a Big Winner
• Best Ports Stock: Adani Ports vs JSW Infrastructure
• Adani Power vs Tata Power: Which Power Stock is Better for 2024?
• Adani vs Ambani - All Your Questions Answered
• Adani Group and Hindenburg Research: Who Will have the Last Laugh?

You could also refer to both fundamentals and valuations of Adani group stocks on Equitymaster's Indian stock screener.

Happy Investing!

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...