Indian Stock Market News | Investing in Adani Shares Now? Pros & Cons Explained

Investing in Adani Shares Now? Pros & Cons Explained | Indian Stock Market News
Should you invest in Adani shares now? The Adani Group has been in the spotlight throughout 2023, mainly due to allegations made by Hindenburg Research, an American short-seller group. As of September 9, 2023, investing in Adani Group shares presents both opportunities and challenges that investors must consider.
Historically, the returns and market capitalizations of many Adani Group companies are impressive. For example, Adani Green Energy has demonstrated a remarkable 5-year return of 6247.56%, while Adani Enterprises has grown by 2655.86% over the same period. Adani Green Energy’s current share price stands at INR 1,951.66, reflecting a moderate increase of 2.65%. Its market capitalization is INR 3,09,686 crore, and it has a PE ratio of 212.40, indicating a premium valuation. However, high PE ratios, intraday volatility, and limited dividend yields might deter some investors.
Adani Enterprises' share price is INR 3,275.82, reflecting a marginal increase of 1.1%, and it boasts a market cap of INR 3,71,503 crore with a PE ratio of 105.76. It’s crucial for potential investors to stay informed about the latest developments and controversies surrounding the Adani Group, as these factors can significantly impact the performance of its shares. Recent data as of February 20, 2024, shows that Adani Green Energy’s 52-week range is between INR 1,990.00 and INR 439.10, reflecting its historical volatility. The trailing twelve-month EPS is INR 9.20, and it has a PB ratio of 41.05, signifying strong investor optimism for future growth. However, the absence of a dividend yield indicates a focus on reinvestment for growth.
Adani Ports SEZ’s share price stands at INR 1,314.36 with a marginal increase of 0.02%, and it has a market cap of INR 2,82,330 crore. The PE ratio is 39.05, and the PB ratio is 6.00, with a modest dividend yield of 0.38%. Adani Power’s share price is INR 568.78, and it has a PE ratio of 9.38. The market cap is INR 2,18,939 crore, and its 52-week range is between INR 589.45 and INR 132.40. Adani Gas, now known as Adani Total Gas, has a share price of INR 1,018.74 and a PE ratio of 186.24, with a market cap of INR 1,11,267 crore.
Adani Wilmar's share price is INR 367.49 with an exceptionally high PE ratio of 561.30 and a market cap of INR 47,626.72 crore. Adani Energy Solutions, formerly Adani Transmission, has a share price of INR 1,072.10, a PE ratio of 102.85, and a market cap of INR 1,19,854 crore. Lastly, ACC, or Associated Cement Companies, has a share price of INR 2,746.40, a PE ratio of 30.82, and a market cap of INR 50,148.59 crore.
The Adani Group has faced various controversies, including allegations of cronyism, financial leverage concerns, stock market rigging, tax evasion, and stock manipulation. On January 4, 2024, the Supreme Court rejected demands for a court-monitored probe into these allegations, citing SEBI’s comprehensive investigation. In January 2023, Hindenburg Research accused Adani of orchestrating "the largest con in corporate history." Following these allegations, Adani’s market value dropped by over $104 billion, nearly half of the group's total value.
In response, Adani canceled its planned $2.5 billion follow-on public offer due to market volatility. The Reserve Bank of India initiated inquiries into banks' exposure to Adani firms, and major financial institutions like Citigroup and Credit Suisse ceased accepting Adani Group bonds as collateral. S&P Dow Jones Indices removed Adani Enterprises from its sustainability index, and Norway’s Oil Fund divested its stake in Adani shares.
Given these factors, anyone looking to invest in the Adani Group must carefully evaluate the pros and cons before making a decision. Thorough research, understanding financial metrics, and staying informed about recent developments are crucial. Investing in Adani shares can present significant opportunities but also comes with notable risks. Make sure to align your investment decisions with your risk tolerance and financial goals.
Join us as we explore whether investing in Adani shares is a wise move in the current financial landscape.
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