FIIs are Buying into these 5 Adani Stocks. Take a look...

The Adani Group, one of the largest business conglomerates in India, is seeing a surge in foreign investments in its group companies.

After Hindenburg Research's claims, the Indian Supreme Court dismissed Adani Enterprises' concerns about the debt probe.

This ruling worked in favor of the Adani group companies, resulting in a 12% increase in the share price and a total market capitalization of over Rs 15 trillion.

As a result, foreign investors increased their holdings in five Adani stocks during the March 2024 quarter.

Take a look...

#1 Adani Power Ltd

At the top of the list is the largest private thermal power producer in India, Adani Power (APL).

Power produced by its projects is sold by Adani Power and its subsidiaries under a variety of terms, including merchant terms, short-term (Power Purchase Agreement) PPAs, and long-term PPAs.

With nine power facilities located throughout India, the firm now has a 15,250 MW capacity.

The company has decent fundamentals to boast about. The company's revenue has grown at a CAGR of 14% in the last 3 years.

Improved operating efficiency has allowed net profit to increase at an astounding 3-year CAGR of 120%.

This has resulted in healthy return ratios. The company's 3-year (Return on Equity) RoE stands at 34.3% while its 3-year (Return on Capital Employed) RoCE stands at 14.5%.

It has recently paid off all the outstanding sustainable debt of Mahan Energen Ltd. It has also prepaid other secured and unsecured debt using its cash flows.

Currently, the company is focused on expanding its capacity by 4.8 gigawatts through brownfield expansions at existing facilities.

In March 2024, FIIs increased their stake in Adani Power to 15.91%, holding 613,513,055 shares, versus 15.86% in December 2023, with 611,836,515 shares.

Adani Power's stock has surged by 198.4% in the past year, including a 15.6% gain in the last month.

#2 Adani Ports & Special Economic Zone Ltd

Second on this list is Adani Ports & Special Economic Zone.

Adani Ports & Special Economic Zone (APSEZ) handles port infrastructure construction, management, and services.

It has established connections between multiple product Special Economic Zones (SEZ) and the port at Mundra.

The company's revenue is generated through four main verticals: ports & terminals, logistics, SEZ & Ports, and operations & maintenance.

It has a total operating capacity of 538 MMT. APSEZ also owns the biggest container handling facility in India, with 62% capacity on the west coast and 38% on the east coast.

The company has experienced a 21% CAGR in revenue over the past three years, while its bottom line has grown by 28% in the same period.

For 3Q FY24, the company recorded its best ever quarterly and nine-month performance, with record cargo volumes, revenue, and EBITDA.

It recorded a 44% YoY increase in cargo handling volume.

Despite the ongoing red sea developments, the company has not faced any significant impact on its volumes.

Additionally, it has expanded its warehousing capacity by adding warehouses in Indore and Mumbai, resulting in a total warehousing capacity of 2.4 million square feet.

In March 2024, FII ownership of Adani Ports rose by 26 basis points to 14.98%.

The stock price has seen a 5.3% rise in the past month and a significant 99% growth in the past year.

#3 Adani Green Energy Ltd

Third on the list is Adani Green Energy.

Adani Green Energy (AGEL) is a holding company of several subsidiaries carrying business of renewable power generation within the group.

It is primarily involved in renewable power generation and other ancillary activities.

The company has a current project portfolio of 20,434 MW.

AGEL has expanded into 12 Indian states, using 25-year Power Purchase Agreements (PPAs) with government entities.

The company has a portfolio of 54 operational projects and 12 under construction, utilizing the latest technologies in renewable energy.

In the December 2023 quarter, the company's operational capacity has increased by 16% to 8.4 gigawatts, and it is further expected to increase to 2 gigawatts in Q4FY24.

The topline has grown at a 3 years CAGR of 45%, while the net profit of the company has grown at a 3-year CAGR of 192%.

It has generated strong returns with a 3-year average RoE and RoCE of 19.1% and 8.6%, respectively.

AGEL's global annual renewable capacity addition increased by almost 50% in 2023.

In the March 2024 quarter, Adani Green Energy saw a rise in FIIs holdings by 12 bps to 18.15%.

Shares of AGEL have decreased by 4.2% in the last month, while in the past year the share price has seen a growth of 89.2%.

#4 Adani Total Gas Ltd

Fourth on the list is Adani Total Gas Ltd (AGL).

AGL supplies natural gas to various users through its City Gas Distribution (CGD) business, operating networks for continuous piped natural gas (PNG) and compressed natural gas (CNG) supply.

It ventured into e-mobility and biomass businesses through subsidiaries - Adani Total Energies E-mobility and Adani Total Energies Biomass.

It has also formed a 50:50 joint venture for its gas meter manufacturing business.

In terms of financials, the 3 years revenue CAGR grew by 33%, while the net income saw an increase of 8%.

It has generated strong returns with a 3-year average RoE and RoCE of 23.31% and 25.69%, respectively.

As of March 2024, FIIs hold 144,462,253 shares in Adani Total Gas, a 13.13% stake, compared to 143,677,727 shares, or 13.06% as of December 2023.

Shares of Adani Total Gas have decreased by 2.4% in the last month and 1.9% in the last year.

#5 Adani Wilmar Ltd

Fifth on our list is Adani Wilmar Ltd.

Adani Wilmar is a joint venture between Adani and Wilmar group of Singapore that deals in edible oil, food, and other FMCG products.

The company is also engaged in the production of industry essential products such as castor derivatives, Oleo derivatives, and de-oiled cake, among others.

Adani Wilmar sells its entire range of packed products in the edible oils, food, and FMCG segments under various brands.

The company has seen a consistent growth in its revenue at a CAGR of 25%, while its net profit has grown at a CAGR of 8%.

The company's 3-year average ROE and ROCE are 13.1% and 18.3%, respectively.

As of March 2024, foreign institutional investors hold 10,015,651 Adani Wilmar shares, representing a 0.77% stake in the company.

This is up from 0.65% of the total paid-up capital of the company in December 2023.

Adani Wilmar shares have increased by 1.4% in the last month. However, the stock has decreased by 17.8% in the last year.

Snapshot of FII and Mutual Fund Holding in Adani Group Stocks

For more, you can also check out Equitymaster's stock screener which has a separate screen on Adani stocks -

Dig deeper into Adani stocks here.

In Conclusion

Despite debt and valuation concerns from time to time, the Adani group companies have stood tall amid the volatility and reduced liquidity risk, improved governance, and increase transparency over time.

This trend of FIIs buying is typically associated with a positive outlook, driven by numerous factors such as increased investor confidence, anticipated growth, or favourable industry trends.

It is crucial for investors to conduct comprehensive research before approaching tempting signals.

This is just one aspect of the overall investment landscape. A comprehensive analysis of market conditions, company fundamentals, and industry trends is crucial for making informed decisions.

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...