Adani Power shares slide 6% after two-day rally; key details here

Adani Power surged over 34 per cent in two sessions after the market regulator cleared it of Hindenburg's allegations, while the stock also traded ex-split on Monday

Shares of Adani Power fell nearly 6 per cent on Tuesday, after the stock rallied over 34 per cent in the previous two sessions amid reports that GQG Partners sold some stake in the Adani Group company. 

 

The power producer's stock fell as much as 5.7 per cent during the day to ₹160.25 per share. In morning deals, the stock hit a record high of ₹182.7 apiece, before the stock took a downturn. The stock pared losses to trade 3.5 per cent lower at ₹164 apiece, compared to a 0.22 per cent decline in Nifty 50 as of 10:05 AM. 

 

 

Adani Power's stock rose over 34 per cent in the last two sessions after the market regulator gave a clean chit against Hindenburg Research's allegations, while the stock traded ex-split on Monday. The counter has risen 56 per cent this year, compared to a 6.4 per cent advance in the benchmark Nifty 50. The company has a total market capitalisation of ₹3.18 trillion. 

Adani Power clarifies on high volume

After exchanges sought clarification from Adani Power with reference to the movement in volume, the company said it is purely driven by market conditions. "The management of the company neither has any control nor has any knowledge of the reasons for the increase in volume of equity shares of the company."

GQG sells some Adani Power shares

GQG Partners LLC, in a $250 million deal, sold Adani Power shares to SBI Funds Management Ltd. and Citadel Securities LLC last week, Bloomberg reported on Monday.

 

GQG Partners sold about 35 million shares, or about a 1 per cent stake, at ₹610 to ₹625 per share, with SBI Mutual buying most of the shares, the report said. GQG Partners Emerging Markets Equity Fund held 68.39 million shares, or a 1.77 per cent stake, in Adani Power at the end of June, according to the BSE Ltd.

Morgan Stanley on Adani Power

Last week, Morgan Stanley initiated coverage on Adani Power stock with an overweight rating, citing its improving market share and favourable regulatory resolutions. 

 

Morgan Stanley noted that Adani Power holds an 8 per cent share in both coal capacity and generation, which it expects to rise to 15 per cent by fiscal 2032 with a 41.9 gigawatt (Gw) portfolio, 2.5 times its fiscal 2025 level.

 

The brokerage noted that the power producer has resolved most regulatory issues. It maintains a strong balance sheet with a projected net debt-to-Ebitda ratio of 1.5x in fiscal 2025, and plans a $27 billion capex for 23.7 Gw of additions, of which 60-65 per cent will be funded through internal accruals, Morgan Stanley added. 

 

In its bull case scenario, Morgan Stanley set a target price of ₹1,041, assuming the company ties up its entire under-construction and operational merchant capacity.