Adani Power, Adani Wilmar trade lower after Hindenburg report

Shares of Adani Power and Adani Wilmar hit their respective lower price bands in Friday's trade as the conglomerate's stocks continued to bleed after US short-seller Hindenburg Research launched a scathing attack on it. In its report, Hindenburg claimed key listed Adani Group companies had substantial debt and sky-high valuations. In response, Adani said that its debt is at a manageable level and refuted the allegations as baseless Adani Power stock fell 5 per cent to its lowest circuit level of Rs 248.05 against a previous close of Rs 261.10. Adani Wilmar also sounded in the same tune to hit a lower price band of Rs 517.30 over its previous close of Rs 544.50.

Adani Enterprises, Adani Ports, Adani Transmission, Adani Green Energy and Adani Total Gas, were up to 15.96 per cent in early trade. In addition to this, the shares of Adani's recent acquisitions - ACC, Ambuja Cements and NDTV -- also fell today in a rub-off effect.

Adani stocks are likely to continue to be under pressure due to the fallout from the Hindenburg report. The elevated valuations of Adani stocks are a serious concern, said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

The following public offer FPO of Adani Enterprises, the flagship firm of the Adani Group, began today and would remain open for subscription until January 31, 2023.

Adani Enterprises hopes to raise more than 20,000 crore from this FPO and the net proceeds would be used for debt repayment, capital expenditure, subsidiary firms and corporate purposes.

The Hindenburg research report and strong profit booking before Budget 2023 have resulted in a sharp fall in Adani group stocks, including Adani Power. A daily close below 247 could cause a further fall to Rs 217. AR Ramachandran said that investors should only buy if a daily close is above the resistance of Rs 273.

The stock was last seen trading lower than 5 day, 20 day, 50 day, 100 and 200 day moving averages. The RSI, the counter's 14 day relative strength index, came at 27.27. A level below 30 is considered oversold, while a value above 70 is considered overbought. The company's stock has a negative P E ratio of 616.19, which is a negative price-to- equity ratio.

The scrip has a one-year beta of 1.28, indicating high volatility.

The daily chart shows that Rs 544 is a strong resistance. A daily close below Rs 492 support could cause a further fall to Rs 446. The Daily Close is above the resistance of Rs 544 and investors should buy only if a daily close is above the resistance of Rs 544, said Ramachandran, Tips 2 trades' spokesman.

Adani Wilmar was seen trading lower than 5 day, 20 day, 50 day, 100 and 200 day moving averages. The RSI was 34.14, the counter's 14 day relative strength index. A level below 30 is considered overbought, while a value above 70 is considered overbought. The company's stock has a price-to- equity P E ratio of 101.65.

Adani Wilmar has an average target price of Rs 850, Trendlyne data shows a potential upside of 64.46 per cent.

The Indian equity benchmarks extended their plunge in early deals, dragged down by banks, financials and energy stocks.