22 May Why Adani stocks rally up to 17% – Should You Buy Now?

Adani stocks rally up to 17%, crossing the Rs 10 lakh crore market valuation

The Adani Group has been making headlines recently, with its shares experiencing a notable rally and crossing the Rs 10 lakh crore market value mark.

This surge in stock prices follows the clearance given by a Supreme Court-appointed expert committee, which found no evidence of regulatory failure in the Adani Group-Hindenburg case.

However, the committee did acknowledge the presence of short positions building up on Adani Group stocks ahead of the publication of damaging allegations by US short-seller Hindenburg Research.

Despite this development, the Adani Group is exploring the monetization of non-core real estate assets to fuel its investment in new real estate projects.

So, things are changing for Adani Group.

Now, the question arises

Should you buy Adani Stocks Now?

Let’s try to find the answer…

Adani Group Stocks Surge: Adani Enterprises and Adani Wilmar Lead the Way

-Adani Enterprises, a prominent Nifty50 stock, witnessed an impressive surge more than 17% and reached Rs 2,300.

-Adani Wilmar, the conglomerate’s edible oil arm, experienced a significant jump of 19% and reached Rs 444.

The remaining stocks within the Adani family also rallied with a minimum gain of 5%, including

-Adani Ports,
-Ambuja Cements,
-ACC, Adani Power,
-Adani Transmission,
-Adani Green,
-Adani Total Gas, and
-NDTV

The Reason

Adani Group’s shares rose by up to 17 % today in continuation of last week’s rally after the Supreme Court-appointed expert committee cleared the conglomerate of any regulatory failure in the Adani Group-Hindenburg case.

The panel, however, said it could not deny the evidence of short positions building up on Adani Group stocks ahead of the publication of allegations by US short-seller Hindenburg Research.

Adani Group Stocks Rally as SC Committee Finds No Regulatory Failure

The Supreme Court-appointed expert committee’s report stated that it could not identify any regulatory failure in the Adani Group-Hindenburg case.

In its report submitted to the Supreme Court, the six-member panel stated that, based on the explanations provided by the Securities and Exchange Board of India (Sebi) supported by empirical data, it is not possible to conclude that there has been a regulatory failure regarding the allegation of price manipulation.

The committee emphasized the need for an effective enforcement policy that aligns with Sebi’s legislative position and called for coherence and consistency.

Furthermore, the committee clarified that it cannot assert a regulatory failure on Sebi’s part concerning minimum public shareholding rules or related party transactions. The report’s findings shed light on the committee’s perspective regarding the regulatory aspects surrounding the Adani Group-Hindenburg case.

The Securities and Exchange Board of India (Sebi) also reported that its investigation into alleged violations in money flows from offshore entities into the conglomerate did not yield any conclusive findings.

SC Committee Highlights Evidence of Short Positions and Profiting from Adani Stock Crash

Contrary to finding any regulatory failure in the Adani Group-Hindenburg case, the six-member panel acknowledged the presence of evidence indicating a build-up in short positions on Adani Group stocks prior to the release of the report by US-based short seller Hindenburg Research.

Additionally, the committee noted instances of profiting from squaring off positions following the significant drop in prices subsequent to the publication of the damning allegations.

The committee’s findings shed light on certain activities surrounding the Adani Group stocks during the period under investigation.

Adani Group Explores Monetization of Non-Core Real Estate Assets

The Adani Group is considering the possibility of monetizing certain parts of its real estate holdings that have been identified as non-core to its operations, according to sources familiar with the matter.

The group has already pinpointed some of these assets and is actively expanding the list.

The intention behind the sale is to generate funds for investment in new real estate projects undertaken by the group.

Adani Group’s Market Cap Crosses Rs 10 Lakh Crore Amid Positive Investor Sentiment

Despite facing negative publicity due to a damaging report by US-based short-seller Hindenburg, the market capitalization of the Ahmedabad-based conglomerate surpassed Rs 10 lakh crore.

The recent report by the Supreme Court-appointed expert committee has instilled confidence in investors.

Additionally, the group’s plans to monetize non-core assets and engage in investor meetings have further bolstered investor confidence, according to Kranthi Bathini of WealthMills Securities

Exercise Caution: High Volatility Persists, Recommends High-Risk Appetite for Adani Stocks

Despite the recent bounce in Adani stocks, experts advise caution and suggest that only investors with a high-risk appetite should consider venturing into this territory.

The market continues to exhibit significant volatility, necessitating careful evaluation of investment decisions.

Investors are urged to weigh the risks associated with the ongoing fluctuations in Adani stocks before making any investment choices.

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