New Delhi: The Adani Group saw about Rs 3.6 lakh crore wiped out from its market value Tuesday, as the stock markets crashed more than 5.7 percent following mid-day poll results showing the Narendra Modi-led Bharatiya Janata Party set to fall well short of a single-party majority in the Lok Sabha.
On Monday, the Sensex and Nifty rose 3.4 percent and 3.25 percent respectively, with markets surging on the first day of trading following the release of exit poll results, which showed the BJP coming to power with a comfortable majority.
The Adani stocks rode this surge and the combined market value of the Group crossed levels seen before the Hindenburg Research report, which had decimated its value in January 2023.
On 23 January 2023, a day before the Hindenburg report was released, the Adani Group’s market capitalisation stood at Rs 19.2 lakh crore. After Monday’s surge, it rose to Rs 19.4 lakh crore.
Counting day Tuesday saw a very different picture. The Sensex and Nifty erased all of the previous day’s gains and then some — falling 5.7 percent and 5.9 percent, respectively. The Adani Group’s stocks fell between 10-21 percent.
This fall saw the group’s market capitalisation falling once again below its pre-Hindenburg levels, coming in at Rs 15.8 lakh crore.
A major boost for the Adani stocks had been the perception that they would benefit from the return of the Modi government for a third term.
In fact, international brokerage CLSA listed four Adani Group companies — Adani Ports & SEZ, Ambuja Cements, ACC and Adani Enterprises — among its list of 54 ‘Modi stocks’. These ‘Modi stocks’, it said, were the ones that were “perceived to be the most direct beneficiaries from popularly expected policy measures”.
Now, the perception among stock market analysts is that the National Democratic Alliance’s greatly reduced majority would mean it would focus more on welfare measures rather than stick to its plan of spending big on infrastructure creation.
This resulted in infrastructure-related stocks seeing sharp falls, including for the Adani Group. Adani Ports & SEZ, for example, saw the biggest fall of 21.3 percent on Tuesday. Adani Energy Solutions, formerly Adani Transmission, saw its stock price fall 20 percent.
The next biggest fall, of 19.3 percent, was seen by the group’s flagship company Adani Enterprises. Adani Green Energy fell 19.2 percent.
Ambuja Cements and ACC, the group’s two cement companies, fell 16.9 percent and 14.7 percent respectively.
Also read: Higher profits, lower debt, ‘Modi stocks’ effect — Adani market cap zooms past pre-Hindenburg levels