Adani Group Shares Soar After Supreme Court Rejects Probe

The Adani group shares witnessed a sharp surge on Wednesday after the Supreme Court refused to order an investigation against the conglomerate over fraud allegations made by US-based Hindenburg Research. The positive court ruling boosted investor sentiment, with all 10 Adani group companies ending higher.

As of January 4, 2024 (11:00 AM), the share prices of some of Adani Group companies are as follows:

• Adani Enterprises Limited (ADANIENT.NS): INR 2,857.653
• Adani Total Gas Ltd: ₹1,110.15
• Adani Energy Solutions Ltd: ₹1,172.80
• Adani Wilmar Ltd: ₹382.50
• Adani Green Energy Ltd: ₹1,683.75
• Ambuja Cements Ltd: ₹544.20
• ACC Ltd: ₹2,289.45
• NDTV Ltd: ₹283.00
• Adani Ports & SEZ: ₹1,112.85
• Adani Power: ₹546.00

Supreme Court Order Removes Regulatory Uncertainty

According to market observers, the Supreme Court’s rejection of a probe into the Hindenburg allegations has removed a key overhang concerning potential regulatory actions. This has renewed buying interest in Adani stocks.

While thesharp up-movedoes not imply that the issues have been fully resolved, it does suggest that worst-case concerns around structural damage have receded considerably.

What was the Supreme Court’s Verdict on the Regulatory Probe Against Adani Group

The Supreme Court’s verdict on the regulatory probe against the Adani Group was as follows:

• The court rejected allegations of conflict of interest raised by the petitioners against some of the members of the expert committee.
• The court said the facts of the case did not warrant a transfer of investigation from the market regulator, Securities and Exchange Board of India (SEBI).
• The court directed SEBI to complete its investigation of the group within three months.
• The court also dismissed arguments by petitioners regarding a perceived conflict of interest among the members of the Expert Committee formed earlier.
• Both SEBI and the government were instructed to investigate the allegations of short-selling as mentioned in Hindenburg Research’s report.

The verdict signaled that there would not be increased regulatory or legal risk on the Adani Group beyond the current SEBI investigation. Shares of various Adani Group companies, such as Adani Energy Solutions, Adani Total Gas, Adani Green Energy, and Adani Enterprises, rose after the Supreme Court ruling.

Adani Still Behind Mukesh Ambani’s Reliance Industries

Despite the smart gains, the Adani group still trails behind Mukesh Ambani’s Reliance Industries Limited (RIL) when it comes to market capitalization ranking.

As of last closing, RIL’s m-cap stood at Rs 17.48 lakh crore, while Adani was a distant second at Rs 15.27 lakh crore. The gap between both conglomerates’ cumulative market caps is over Rs 2 lakh crore as of now.

To surpass RIL, Adani group will have to deliver consistent growth in its core infrastructure businesses. It will also need to boost investor confidence further through better disclosures and transparency.

The coming days will reveal whether the group can sustain its upward trajectory even as legal battles and overhangs remain on the horizon.