Adani Stocks Jump $20 Billion on Signs of Landslide Win for Modi
(Bloomberg) -- Shares of Indian billionaire Gautam Adani’s firms rallied on Monday, adding almost $20 billion to the group’s market value, as exit polls strongly signaled a decisive victory for Prime Minister Narendra Modi’s party in the general elections that concluded Saturday.
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All 10 Adani Group stocks surged in Mumbai, with Adani Power Ltd. and Adani Ports & Special Economic Zone Ltd. emerging as the top gainers, rising by 16% and 10%, respectively. The rally propelled the conglomerate’s market value to $234 billion — just short of the level it was at before US short-seller Hindenburg Research’s bombshell report in early 2023 triggered a meltdown.
Adani, who’s back to being Asia’s richest person overtaking compatriot Mukesh Ambani, also hails from Modi’s home state of Gujarat. During Modi’s decade-long tenure as prime minister, the first-generation entrepreneur rose in global prominence often by dovetailing his corporate strategy to the government’s nation-building priorities in infrastructure, green energy, defense and digital services.
“Everything seems to be going in their favor,” said Sanjiv Bhasin, a director at IIFL Securities Ltd. “Their businesses are monopolistic and they are doing very well. The expected political stability will add to that.” Adani Ports and edible oils maker Adani Wilmar Ltd. are the brokerage’s top picks, he said.
The Modi government’s efforts to outrun China by bolstering India’s manufacturing and infrastructure have created a tailwind for industrial stocks. That’s why the polls’ predictions of Modi’s party winning an emphatic majority has stoked optimism about policy continuity.
With strongholds in India’s ports, airports and power generation businesses, the Adani Group has become a proxy to the Modi government’s ambitions to develop world-class infrastructure in the country.
It’s already undertaking some of the most high-profile projects in India, including building a second airport on the outskirts of Mumbai, redeveloping Dharavi — one of Asia’s largest slum clusters — and constructing the world’s largest renewables park in Khavda.
Adani Ports was the top performer on the benchmark NSE Nifty 50 Index on Monday, while flagship Adani Enterprises Ltd. followed with a gain of 9.8%.
After India’s top court in January ordered that no fresh probes were needed around the short-seller report, Adani has returned to growing rapidly and diversifying his businesses. The group is keeping its debt levels on a tight leash — pointing to one of the lessons learned from last year’s withering short-seller attack that had at one point wiped out more than $150 billion of market value.
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