Billionaire Gautam Adani-led Adani Group has expanded massively in the past two decades. The group's size has grown from one publicly listed company in the early 2000s to 10 in 2023. They include the recently-acquired cement majors ACC, Ambuja Cements and NDTV. The transformation of the group is in line with India's growth story. At present, India’s gross domestic product (GDP) stands at over $3 trillion against $709.15 billion in 2004. The country’s GDP stood at $2.04 trillion in 2014 when Narendra Modi became the prime minister.
Adani Group has a presence in various sectors including infrastructure, power, airports, cement, media and FMCG. The group has also created huge wealth for investors since 2004.
Over 2,000% under UPA
Interestingly, Adani Group stock Adani Enterprises had rallied enormously during the UPA regime. Between May 2004-May 2014, shares of Adani Enterprises soared 2,186 per cent, as per data available with Ace Equity. Adani Enterprises was the only listed Adani Group firm in 2004. Nearly three years later, Adani Ports (earlier known as Mundra Port) was listed in November 2007. Adani Power got listed in August 2009.
The group in May 2011 announced the $2 billion acquisition of Abbot Point Port in Queensland, Australia, on a 99-year lease, marking the beginning of the company’s business expansion outside India. Shares of Adani Ports gained 18 per cent between November 27, 2007 and May 23, 2014, while Adani Power declined 35 per cent between August 20, 2009, and May 23, 2014. The combined market capitalisation of Adani Group stood around Rs 1.20 lakh crore at the time when the NDA came into power in 2014.
At present, the total market capitalisation of the 10-listed Adani group of companies stands at around Rs 10 lakh crore. The list includes Adani Transmission, Adani Green Energy, Adani Total Gas, Adani Enterprises, Adani Power, Adani Ports, Adani Wilmar, ACC, Ambuja Cements and NDTV.
Up to 4,500% under NDA
Shares of Adani Enterprises surged as much as 756 per cent to Rs 4,189.55 on December 21, 2022 against Rs 489 on May 26, 2014. However, shares of the company witnessed heavy selling after Hindenburg Research Report on January 24, 2023. Despite the steep fall, the scrip is still up 341 per cent so far under the NDA government to date (May 26, 2014-Feb 8, 2023). Adani Power and Adani Ports have rallied 199 per cent and 169 per cent, respectively, during the same period.
Adani Power is India’s largest private thermal power producer with a power generation capacity of 13,650 MW including 13,610 MW, of thermal power plants and a 40 MW solar power project, according to the company’s annual report 2021-22.
Meanwhile, Adani Transmission, which got listed in 2015, has surged 4,536 per cent to date. Adani Total Gas and Adani Green Energy have also jumped more than 1,000 per cent after their listing on bourses in 2018. Of late, Adani Wilmar, which got listed in February 2022, has delivered a nearly 60 per cent return to investors against the closing price of the listing date. While filing its DRHP, the company said it had the largest distribution network among all the branded edible oil companies in India.
Market cap of Adani Enterprises stood at Rs 2.46 lakh crore on February 8, 2023. It was followed by Adani Total Gas (Rs 1.53 lakh crore), Adani Transmission (Rs 1.47 lakh crore), Adani Ports (Rs 1.29 lakh crore), Adani Green Energy (Rs 1.27 lakh crore), Ambuja Cements (Rs 76318 crore), Adani Power (Rs 70, 196 crore), Adani Wilmar (Rs 54502 crore), ACC (Rs 37,057 crore) and NDTV (Rs 1468 crore).
Adani Group: Report Card
The revenue and profit of the group have jumped manifold in the past 20 years. Take this: standalone revenue of Adani Enterprises climbed to Rs 11,699.54 crore in FY14 from Rs 7,078.35 crore in FY2004. For the financial year ended March 2022, the standalone revenue of Adani Enterprises stood at Rs 26,824.05 crore. Likewise, the standalone net profit of the company jumped to Rs 720.70 crore as of March 31, 2022 against a loss of Rs 178.69 crore in FY2014. The company had a profit of Rs 124.09 crore in FY2004.
The company's standalone operating profit stood at Rs 1,809.31 crore in FY2014, Rs 457.93 crore in FY2014 and Rs 171.26 crore in FY2004.
Meanwhile, the standalone net profit of Adani Ports declined to Rs 297.56 crore in FY22 against Rs 2,016.17 crore in FY2014. The company posted a net profit of Rs 187 crore in FY2004. On the other hand, Adani Power registered a standalone net loss of Rs 182.23 crore in FY22 against a profit of Rs 596.26 crore in FY2014 and Rs 170.80 crore in FY2009.
Adani Wilmar registered a standalone net profit of Rs 807.94 crore in FY22 on gross sales of Rs 52,361.01 crore. On the other hand, Adani Transmission posted a loss of Rs 64.61 crore in FY22 on the top line of Rs 739.81 crore. Adani Total Gas posted a net profit and gross sales of Rs 504.66 crore and Rs 3,206.36 crore in FY22, respectively, data available with Ace Equity showed.
Mutual funds exposure
Despite the bull run that Adani stocks have seen in the last 20 years, most of the mutual fund houses have marginal exposure at present in the Group companies. According to Fisdom Research, as of December 2022, mutual fund industry has a negligible exposure of 0.64 per cent to Adani group companies. Of which 0.18 per cent was through the passive route, where the fund manager had no option but to invest in the stocks.
Adani Enterprises & Adani Ports and Special Economic Zone forms a part of the Nifty 50 buckets with an overall weightage close to 1 per cent. Along with these two stocks, Adani Transmission and Adani Green Energy form a part of the Nifty 100 buckets with an overall weightage of 2.1 per cent. There are more than 100 passive schemes and more than 200 active schemes with an investment in Adani group stocks.
“The fund manager has very little or no control over passive funds as they replicate the indices,” Fisdom Research said in a report.
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