Adani Group shares fall on Mundra SEZ cancellation

All the three Adani Group stocks fell on the bourses after the central government withdrew the permission granted to group's 1,840 hectare multi-product special economic zone (SEZ) in Mundra for alleged violation of rules.

Adani Group's port and special economic zone arm, Adani Ports and Special Economic Zone Ltd (APSEZ) witnessed a sharp drop on Bombay Stock Exchange (BSE), joined by Adani Enterprises Limited (AEL) and Adani Power Limited (APL).

APSEZ stocks plunged by 2.5 per cent on the Bombay Stock Exchange (BSE) on Tuesday. The stock hit a low of Rs 118 amid heavy selling at the counter.

The central government cancelled Adani Group's SEZ in Mundra on the grounds that the project did not conform to contiguity norms and violated a rule which requires the SEZ site to be vacant before approval is sought for the tax free zone. Besides, the site was land-locked.

However, the government has kept the option open for the company to reapply to the board of approval in the commerce ministry to seek fresh permission. On the other hand, broker sources maintained that the counter had already discounted the development, hence there would not be much selling pressure on APSEZ shares.

"Market has already discounted the buzz. On the other hand, there is growing investors interest towards Adani Group firms. Hence, we do not see much impact of the Mundra Port buzz on the APSEZ share prices," said Vaibhav Shah, MD, Monarch Projects & Finmarkets Ltd. Other Adani Group companies including the flagship, AEL and power arm, APL too fell on the BSE on Tuesday. AEL stocks fell by over 3 per cent to close at Rs 214.30, while APL was down by over 3.8 per cent at Rs 49.55.