Adani Green Energy (AGEL) Suffers Sharp 12% Share Price Plunge Amid Block Deal Fallout”

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New Delhi, 7th August 2023: Adani Green Energy (AGEL) faced a sharp decline in share price, plummeting 12 per cent to Rs 886.25 on the BSE during Monday’s intra-day trade. This drop was triggered by a block deal involving over 40 million equity shares of the company changing hands. Moreover, the stock has been on a downward trend for five consecutive days, experiencing a 19 per cent fall within one week. In contrast, the S&P BSE Sensex only declined 1.2 per cent during the same period.

Despite the recent decline, the current share price is still 101.72 per cent higher than its 52-week low of Rs 439.35, recorded on February 28, 2023. However, AGEL has lost 65.57 per cent of its value compared to its one-year high price of Rs 2,574.05, achieved on August 23 last year.

As of 09:15 am, around 44.24 million shares, accounting for 2.8 per cent of AGEL’s total equity, were traded on the BSE. However, the identities of the buyers and sellers in this transaction were not immediately disclosed.

AGEL, a subsidiary of the India-based Adani Group, boasts one of the largest global renewable portfolios, including 20.4 GW of operating, under-construction, and awarded projects serving investment-grade counterparties. The company specializes in developing, building, owning, operating, and maintaining utility-scale grid-connected solar and wind farm projects. Some of its key customers include Solar Energy Corporation of India (SECI), National Thermal Power Corporation (NTPC), and various State Discoms.

Recently, AGEL announced its financial results for the first quarter of the fiscal year 2023-24 (Q1 FY24). The company reported an impressive 50.93 per cent YoY increase in net profit at Rs 323 crore for the June quarter, compared to Rs 214 crore in the corresponding quarter of the previous year. Additionally, its revenue from operations surged by 55.04 per cent YoY to Rs 2,059 crore, up from Rs 1,328 crore in the same quarter last year. AGEL continues to hold the largest operating renewable energy portfolio in India, with an operational capacity of 8,316 MW.

Despite the positive financial performance, market sentiment remains uncertain, with an average target price of Rs 402 according to Trendlyne data, indicating a potential downside of 57 per cent. The stock also has a one-year beta of 1.16, suggesting high volatility.

It’s worth noting that all Adani stocks experienced significant fluctuations following the Hindenburg setback. In January 2023, Hindenburg Research, a US-based firm, published a report making accusations of stock manipulation and accounting fraud against the conglomerate led by Gautam Adani. However, Adani denied all the allegations. The Indian market regulator, SEBI, conducted investigations into suspected violations in overseas investments in the Adani Group but did not find any conclusive evidence. A Supreme Court-appointed panel also expressed doubts about the case’s potential for resolution.