Hindenburg vs Adani Saga: Adani investors poorer by around Rs 2.5 lakh crore as shares plunge up to 23%

Adani Group bribery case: As the Adani Group conglomerate's Chairman Gautam Adani has been indicted over alleged bribery case by the US court, all of the Adani Group stocks tumbled sharply up to 23 per cent in trade on Thursday (November 21).

On the sharp losses, the group's market capitalisation has taken a hit by around Rs 2.5 lakh crore, with Adani Enterprises leading losses in the stable.

ALSO READ: Gautam Adani, other defendants allegedly paid $250 million in bribes to Indian government officials; Adani group denies, says allegations baseless

Nonetheless, an Adani spokesperson denied the charges, describing the allegations made by the US Department of Justice and the US Securities and Exchange Commission against Adani Green directors as "baseless".

Amid the rout, the other stocks from the basket which lost sharply include Adani Energy Solutions (down 20 per cent), Adani Green Energy (down 19 per cent) and Adani Ports and SEZ ( down over 17 per cent).

The others in the pack including Adani Total Gas (down over 12 per cent), Adani Power (down 11.5 per cent), Ambuja Cement (down over 11 per cent fall) and ACC down more than 7 per cent.

The drag in Adani group stocks has been steep and the worst since the Hindenburg report in early 2023. Earlier around 22 months back, the US short-seller raised red flags about the conglomerate’s debt levels and alleged financial mismanagement.

Analysts caution that while the group’s fundamentals remain strong in certain sectors, sentiment-driven sell-offs could pose near-term challenges.Investors are advised to tread cautiously as Adani Enterprises faces a critical test of its governance, financial resilience, and credibility on the global stage.

Consequent to the slump, Jigar S. Patel, Sr. Manager, Equity Research- Anand Rathi Shares and Stock Brokers held that Most Adani Group stocks are currently trading below their 200-day exponential moving averages (DEMA), a classic technical indicator signalling weakness in long-term trends. However, many of these stocks are showing signs of being in an extremely oversold zone on technical indicators such as the Relative Strength Index (RSI) and stochastic oscillators.

This oversold condition might trigger a short-term bounce, though such rebounds are often short-lived without significant structural support. Consequently, it is advised to adopt a "wait and watch" approach until there is clear evidence of a base formation, which would suggest a more sustainable recovery, added the expert.

Furthermore, here are the key support and resistance level for the Adani Group stocks as given out by Patel:

ADANIENT: Support is at ₹2,100, with resistance at ₹2,500.
ADANIPORTS: Support is at ₹1,000, while resistance is at ₹1,150.
 ADANIPOWER: Support is at ₹430, with resistance at ₹500.
AWL: Support is at ₹280, and resistance is at ₹325.
ACC: Support is at ₹1,850, and resistance is at ₹2,100.
 AMBUJA: Support is at ₹450, with resistance at ₹520.
SANGHI: Support is at ₹70, and resistance is at ₹82.
ADANIGREEN: Support is at ₹1,100, and resistance is at ₹1,250.
NDTV: Support is at ₹140, and resistance is at ₹173.

Investors are advised to monitor these levels closely while waiting for stronger base formations and clearer trends across Adani Group stocks.

Atul Parakh, CEO of Bigul echoing a similar view said that after the recent downfall seen in the Adani group stocks followed by the ongoing legal issues with its directors. It's essential to monitor ongoing legal developments and evaluate the financial health of the companies involved. The outcomes of these legal battles will be crucial for the group's future stability.

Diversifying investments can help mitigate risk, while looking for entry points may provide opportunities for long-term gains. It is suggested to be cautious about such group stocks to avoid risk, added Parakh.