Market experts find themselves at odds when it comes to predicting the trajectory of Adani shares. The recent events surrounding the Adani Group have sent shockwaves through the financial world.
Adani Group Stocks: A Plunge in Market Capitalisation
The market capitalisation of Adani Group stocks took a significant hit, with a loss of Rs 2.24 lakh crore, equivalent to $26 billion. This came after US authorities accused Gautam Adani, his companies, and executives of bribery and fraud on Thursday. Such allegations have raised concerns among experts and investors alike.Impact on Public Market Access
Financial experts believe that the US Department of Justice's (DoJ) accusations will likely restrict access to public markets. International financial institutions and investors are likely to maintain a safe distance until the case is resolved. While the group may not have immediate repayment obligations, public market access could remain restricted for several months. This has led to uncertainty and caution among market participants.Outlook for Adani Shares
Market experts have diverse views on the future of Adani shares. Apurva Sheth, head of research at Samco Securities, advises retail investors to stay away from Adani stocks until the situation stabilises. Only those comfortable with high risk should consider these shares while awaiting further developments. Sheth added that even if the allegations are resolved, share prices may remain range-bound and not reach new peaks soon.Market analysts indicate that investors are worried about potential substantial settlements that the group may need to pay to US authorities. Hemang Jani, founder-director at equity advisory firm Finazenn, explained that the severity of the charges has raised corporate governance concerns. However, Deven Choksey, founder and MD of DRChoksey FinServ, is optimistic about the recovery of stock prices and advises retail investors to maintain their positions.Short-Seller's Impact
Less than two years ago, US short-seller Hindenburg published a critical report in January 2023, causing Adani share prices to decline significantly. The short-seller alleged "brazen stock manipulation" and "accounting fraud" against the conglomerate. This event added to the existing challenges faced by the Adani Group.SKI Capital analysts suggest that while a settlement may bring stability, the group could still face continued challenges in accessing international funding. Narinder Wadhwa, Managing Director of SKI Capital, stated that although the Adani Group has options through appeals and settlements, reputation damage and increased oversight may restrict their ability to secure major international investments.During a media session with Goldman Sachs's emerging markets equity strategist, their analyst confirmed close monitoring of Adani Group developments. The DoJ's criminal and civil charges, potentially resulting in substantial monetary penalties and profit recovery, along with the FBI's participation in the investigation, have created significant legal and reputational challenges for the prominent Indian conglomerate.Adani Group has firmly rejected all allegations and has indicated its intention to seek legal recourse. The future of Adani shares remains uncertain, with market experts closely watching the developments and providing their insights.