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Adani Power is a 'formidable coal franchise', Morgan Stanley says, share price surges
Adani Power is a good illustration of a turnaround in India’s corporate history, Morgan Stanley says even as it initiates coverage with ‘overweight’ rating.
Adani Power Ltd. surged on Friday after Morgan Stanley initiated coverage of the stock with an overweight rating due to its “formidable coal franchise”.
Adani Power’s share price rose as much as 8.80% to ₹686.95 apiece on the National Stock Exchange even as the benchmark NSE Nifty 50 traded half-a-percent lower. The stock is also tracking Adani Group shares, all of which are trading 1-10% higher after SEBI’s order in the Adani-Hindenburg case.
“Adani Power is a good illustration of a turnaround in India’s corporate history, with resolution on most regulatory issues and multiple value-accretive acquisitions,” Girish Achhipalia, Amit Bhinde and Pranjal Jain, analysts with Morgan Stanley India Co. Pvt. Ltd., said in a note.
“Adani Power will deliver strong earnings growth, driven by timely completion of projects and more power purchase agreements in the medium term.”
Adani Group Stocks
Adani Group stocks rose between 1% and 10% on Friday, a day after Securities and Exchange Board of India cleared the ports-to-mining conglomerate of some allegations levelled by US-based short seller Hindenburg Research.
Adani Total Gas Ltd. led the gains among nine listed firms, rising as much as 19%, while the flagship Adani Enterprises Ltd. increased 4.3% intraday. Adani Power Ltd. rose as much as 7.4%, after Morgan Stanley started coverage of the stock with an “overweight” rating. Adani Ports & SEZ Ltd. rose 2%, while Adani Green Ltd. and Adani Energy Solutions Ltd. rose nearly 4% each.
Adani-Hindenburg Case
To be sure,SEBI has cleared two charges against Adani Group firms, 22 other orders are pending.
There is no evidence that the Adani Group used related party transactions to route funds into its listed units, SEBI said in two separate orders published on its website on Thursday. The Ahmedabad-based conglomerate had repeatedly denied the allegations first made by Hindenburg Research in January 2023.
“SEBI has reaffirmed what we have always maintained, that the Hindenburg claims were baseless,” Adani Group Chairman Gautam Adani posted on X, formerly Twitter, after the SEBI orders were released. “Transparency and integrity have always defined the Adani Group.”
SEBI launched its probe into the Adani-Hindenburg case in 2023, after the US-based short seller accused Adani Group of using tax havens and concealing related-party transactions. The charges, which the conglomerate had denied, wiped $150 billion off the group's market value at the time, though most of its stocks have since rebounded.
