Adani Green shares rise after five sessions of losses; here's why

Shares of Adani Green Energy rallied over 5% in intraday trade on Tuesday, ending five sessions losing streak, after Qatar Investment Authority (QIA) acquired a 2.7% stake in the renewable energy arm of Adani Group. In a bulk deal, INQ Holding Llc, a wholly-owned subsidiary of QIA, picked up around 4.26 crore shares of Adani Green Energy, or 2.7% of its equity, at ₹920 apiece for ₹3,956 crore, as per the stock exchange data.

QIA acquired the stake in Adani Green Energy after Infinite Trade and Investment, a promoter entity of the firm, offloaded 2.83% shares in the company via block deal on the BSE on Monday. The shares were sold at an average price of ₹920.43 for ₹4,131 crore. Of the total sold shares, 2.7% was acquired by INQ Holding.

As of June 30, 2023, promoter entities' stake in Adani Green Energy stood at 56.3%, of which 3.4% was owned by Infinite Trade and Investment. Following the stake sale, Infinite Trade’s shareholding in the company was reduced to 0.57%.

Last month, the company informed exchanges that it would raise ₹12,300 crore ($1.5 billion) by selling shares in a qualified institutional placement (QIP), which will be used to expand green energy business.

Snapping five sessions losing streak, Adani Green Energy shares jumped as much as 5.17% to hit an intraday high of ₹1,015, while the market capitalisation climbed to 1.57 lakh crore. Early today, the energy stock opened higher at ₹977 against the previous closing level of ₹965.05 on the BSE. In the last five trading days, the largecap stock has lost nearly 12%.

At the current level, Adani group stock trades 60% lower than its 52-week high of ₹2,574.05 touched on September 23, 2022.  The stock, however, has rebounded 130% from its 52-week low of ₹439.35 touched on February 28, 2023, aftermath of a sell-off triggered by Hindenburg Research report released on January 24, 2023.

This is the second investment by the sovereign wealth fund in billionaire Gautam Adani-led conglomerate after Adani Electricity Mumbai Ltd (AEML), a subsidiary of Adani Energy Solutions.  In 2020, QIA acquired a 25.1% stake in AEML, which owns the electricity distribution business in Mumbai, Maharashtra.

Earlier on Monday, Adani Energy Solutions, formerly known as Adani Transmission, informed exchanges that it achieved financial closure for its $1 billion green high voltage direct current (HVDC) link project in Mumbai. So far, the company has secured a $700 million financial closure with nine international banks for its under-construction HVDC transmission link between Kudus to Aarey, Mumbai. The banking consortium for the HVDC transmission platform comprised DBS Bank Ltd., Intesa Sanpaolo S.p.A., Mizuho Bank Ltd., MUFG Bank Ltd., Siemens Bank GmbH, Société Générale, Standard Chartered Bank, Sumitomo Mitsui Banking Corporation and The Hong Kong Mortgage Corporation Limited.

As per the company, the 80 km multi-faceted HVDC transmission link will enable further ‘greening’ of the Mumbai Grid by supplying more renewable power to the city, while supporting its rising electricity demand. The project will also offer a technological upgradation to the city, while managing all the complexities in developing such a largescale project in a city like Mumbai. The construction work for this link will begin in October 2023.

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