Adani Group shares zoom: Two factors behind today's strong surge

Adani Group shares advanced sharply on Friday, bucking weakness in domestic benchmarks that slipped on profit booking after a three-day rally. The surge in counters of the Gautam Adani-led conglomerate was driven by two key developments.

First, the Securities and Exchange Board of India (Sebi) dismissed allegations of stock manipulation made by US-based short-seller Hindenburg Research against Adani Group companies, including Adani Ports and Adani Power.

Hindenburg had alleged that Adicorp Enterprises was used to route funds from group firms to listed Adani Power. It claimed that in 2020, four Adani companies extended Rs 620 crore to Adicorp, which then lent Rs 610 crore to Adani Power without disclosure in financials of multiple lenders.

The Sebi order covered Adani Ports & SEZ, Adani Power, Adicorp Enterprises, Gautam Shantilal Adani and Rajesh Shantilal Adani. After reviewing the matter, the regulator stated it would "dispose of the instant proceedings against Noticees without any direction."

It clarified that the probe found the transactions did not qualify as related-party deals and no breach of the Listing Agreement or LODR norms occurred.

The second trigger came after Dubai-based real estate major Emaar said it is considering a joint venture (JV) with large companies in India, including Adani Group. Emaar also confirmed it is not pursuing any stake sale in its Indian subsidiary.

Separately, Mayuresh Joshi, Head of Equity Research at William O'Neil India, said Adani's presence across power, renewables and cement could benefit in the medium to long term from supportive government policies. He added that with capital expenditure in housing, infrastructure and ports, Adani Power, Adani Ports and cement major ACC Ltd remain stocks to watch.