The Adani Group Stocks Selloff - 10 Things You Need to Know

Adani group stocks have been a topic of interest in the financial world due to the company's rapid growth and diversification into various industries.

However, the company has also faced criticism and controversy. For instance, the latest Adani-Hindenburg saga.

The US-based short-seller released a long-report, criticizing the Adani group at a time when the company's flagship firm Adani Enterprises was on its way to garner Rs 200 billion (bn) via a follow-on public offer (FPO).

The markets became so unpredictable after the report was released. Take a look at the table below to see the performance of Adani group stocks post release of the report.

Brutal Selloff

Company Name	Change (%)
ACC Ltd.	-22%
Adani Enterprises Ltd.	-45%
Adani Green Energy Ltd.	-46%
Adani Ports and Special Economic Zone Ltd.	-40%
Adani Power Ltd.	-26%
Adani Total Gas Ltd.	-56%
Adani Transmission Ltd.	-44%
Adani Wilmar Ltd.	-27%
Ambuja Cements Ltd.	-31%

Source: Equitymaster

Our fundamental research effort has never recommended an Adani stock. So, we are looking from the sidelines.

We recently wrote on the Adani group, bringing readers up to the latest developments.

These editorial pieces bring together all the latest updates on Adani stocks, including articles and videos that provide a comprehensive overview of the companies and its impact on the stock market.

Let's start with the most important one...that is examining whether you should buy the dip in Adani group stocks.

Time to Buy the Dip in Adani Group Stocks?

Lead smallcap analyst at Equitymaster Richa Agarwal wrote to her readers discussing whether it's time to buy Adani stocks, now that the bad news is factored in the prices...

Here's what she wrote:

• Would I consider buying the dip in Adani group stocks?
  
  Well, as you would have guessed, I would not.
  
  For one, I don't think a tiger changes its stripes. The group doesn't have a good reputation when it comes to corporate governance. While markets may have neglected that at times, I would not. I may convert if there is a drastic change at the promoter and management level. But that seems unlikely for now.
  
  Second, despite the correction, the valuations of Adani group stocks still don't make any sense to me, given the fundamentals they have. Most of these stocks are still riding the narratives in my view, while the business remains overleveraged.

Read the entire editorial here: Should You Buy the Dip in Adani Group Stocks?

Rahul Shah on the Adani stocks selloff...

Our deep value guru and Co-head of Research at Equitymaster Rahul Shah examined whether there are any Adani group stocks that look attractive post the meltdown.

Here's Rahul:

• Have any of the Adani group companies managed to put up a performance that would force me to change my view?
  
  

  I don't think so. Those with weak fundamentals like Adani Power or Adani Green Energy have scarcely managed to improve them while the ones that were expensive like Adani Total Gas or Adani Ports, don't look cheap even after the recent fall.
  
  In view of this, I am not inclined to keep any of the group company stocks on my watchlist for now.

Rahul is still playing the waiting game...

Check out his entire editorial here: The Adani Group Stocks You Should Add to Your Watchlist

You can also check out Rahul's video on the same topic, where he goes a level deeper to make his point: The Adani Correction: An Opportunity of a Lifetime?

Tanushree on how to avoid stocks like Adani...

Co-head of Research Tanushree Banerjee recorded a video discussing the recent turmoil in Adani group stocks and how it reminds her of Vakrangee.

Watch this video to know more: How to Identify Adani and Vakrangee-like Stocks.

To get the most out of your Equitymaster experience, join our YouTube channel.

Adani Marketcap Index Weekly Chart

 

The above chart is created by Equitymaster. Adani Market Cap Index weekly chart above is created using the stocks of the Adani group listed on the National Stock Exchange (NSE) as per the closing of 1st February 2023.

The index is trending at the crucial support zone on the chart.

To know more about these key observations and technical analysis, read Brijesh's note: Adani Group Stocks: Beginning of an End?

Here's a list of our recent top editorials on Adani group

• Why Adani Group Stock Prices are Falling
• Why Ambuja Cement Share Price is Falling
• Why ACC Share Price is Falling
• Why Adani Total Gas Share Price is Falling
• 5 Upcoming IPOs of Adani Group
• Adani Enterprises FPO: 5 Things to Know
• The 5 Most Overvalued Stocks in India. Will These Companies Crash in 2023?
• What Should You Do When Your Favourite Stock Crashes?

Track fundamentals and valuations of Adani group companies

As things stand now, the selloff in Adani group stocks has intensified after Credit Suisse and Citigroup have stopped accepting bonds of Adani companies as collateral for margin loans.

The mega FPO is also withdrawn. The FPO was fully subscribed on the third day despite shares of the company closing at a 5%-10% discount to the FPO price band.

"For me, the interest of my investors is paramount and everything is secondary. Hence to insulate the investors from potential losses we have withdrawn the FPO," Adani said in a message to shareholders.

The Adani-Hindenburg story is going to keep the markets busy for a long time to come...

In the meantime, you could quickly refer to both fundamentals and valuations of Adani group stocks on Equitymaster's Indian stock screener.

We recently added a new section in the screener where you can view the fundamentals of companies within a business group in one screen. This should help you get a better grip on fundamentals, business group wise.

Dig deeper into top Adani group stocks now.

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...