Home Business It once rose by 25%! Adani’s rare surge since it was sniped by short sellers, what happened? – Wall Street News

It once rose by 25%! Adani’s rare surge since it was sniped by short sellers, what happened? – Wall Street News

by admin
It once rose by 25%!  Adani’s rare surge since it was sniped by short sellers, what happened? – Wall Street News

Adani shareholders confirmed that they will repay the US$1.1 billion loan pledged by part of the company’s stock in advance; Adani’s India’s largest private port operator plans to repay about US$600 million in debt in the next fiscal year and reduce capital expenditure by about half; Adani’s Two other companies said management considered appointing an independent body to investigate regulatory compliance.

Since being denounced by the short-selling agency Hindenberg as the biggest scam in corporate history, the company owned by the former richest man in India, Gautam Adani, has been bleeding. In just one and a half weeks, the company’s market value has shrunk by hundreds of billions of dollars. This week, a company ushered in a rare event in recent years soared.

On Tuesday, February 7, local time in India, three of the seven listed companies under the Adani Group closed up. Among them, Adani Enterprises Ltd., the main listed company, rose by as much as 25% in intraday trading, the largest increase since August 2020. Closing up 15%, Adani Wilmar Ltd. (ADAW) closed up nearly 5%, Adani Ports & Special Economic Zone Ltd (ADANPORTS) closed up 1.9%.

Why can some Adani companies have outstanding stock price performance after being short-sold by Hindenberg for three weeks?

First, thanks to the early repayment of the loan associated with the pledged stock. Last Thursday, there was media news that Adani was considering repaying debts in advance and releasing equity pledges to boost confidence. On Monday, the Adani Group confirmed the news, with some of its controlling shareholders announcing that they would repay $1.1 billion in loans ahead of schedule. The loans are secured by shares in some of the group’s companies.

See also  Amazing spring weather! Abundant rains in the North. Pure cold and hail

Secondly, some companies under the Adani Group have recently disclosed their financial reports, releasing the benefits of actively repaying debts, reducing capital expenditures, and improving corporate management.

After the market closed on Monday, Adani Transmission Ltd. announced double-digit growth in both revenue and profit in the fourth quarter of last year. The stock price rose after the opening of the market on Tuesday, but turned down during the session, and finally closed down 0.8%.

On Tuesday, Adani Ports & Special Economic Zone (Adani Ports), India’s largest private port operator and part of the Adani Group, announced that the company’s after-tax profit for the company’s third fiscal quarter ending December, that is, the fourth quarter of 2022 in the Gregorian calendar, had a year-on-year profit after tax. The 13% decline and 18% growth in operating income puts full-year revenue and EBITDA in the top end of the company’s guidance range for fiscal 2022-23.

Adani Ports plans to repay debt of about US$604.2 million in the next fiscal year, which is expected to improve the net debt to EBITDA ratio to about 2.5 times. The media pointed out that this expected ratio is slightly more than 3 times lower than the current one. The company also plans to roughly halve capital spending next fiscal year compared to this one.

Another company, Adani Green Energy Ltd, reported on Tuesday that fourth-quarter net profit rose to $12.4 million, more than double the year-on-year profit of $5.9 million a year ago. Ambuja Cements Ltd., acquired by Adani Group last year, announced that its net profit for the same period was about US$59 million, a year-on-year increase of about 13%, and its revenue increased by about 4% year-on-year.

See also  Scannapieco's team for Cdp, focus on European loans and funds

In addition, the above two companies stated in the disclosed documents,

“In order to uphold the principles of good corporate governance, the management of entities under the Adani Group is considering appointing an independent company/body” to investigate regulatory compliance issues such as related party transactions and internal controls, “Management will evaluate when necessary necessary actions to be taken.”

However, Wall Street News mentioned earlier that despite the company’s surge on Tuesday, Adani’s crisis is far from over. The February stock options of Adani Enterprises that will expire in two weeks, the put-to-call ratio that fell to the low point, and the influential Fibonacci retracement level all indicate that the stock price still has a lot of room to fall, even higher than It fell another 60% on Friday.

Risk Warning and Disclaimer

Market risk, the investment need to be cautious. This article does not constitute personal investment advice, nor does it take into account the particular investment objectives, financial situation or needs of individual users. Users should consider whether any opinions, opinions or conclusions expressed herein are applicable to their particular situation. Invest accordingly at your own risk.

You may also like

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More

Privacy & Cookies Policy