The shares of some companies owned by India’s Adani Group rallied Tuesday, at the start of a crowded week of earnings releases from the subsidiaries of the embattled conglomerate.
Adani Enterprises Ltd.
the flagship part of the group of companies owned by billionaire Gautam Adani, closed the day 14.6% higher, reversing some of the heavy losses it sustained in the wake of a scathing report by U.S. short seller Hindenburg Research.
Adani Ports and Special Economic Zone
and Adani Wilmar
also ended the day higher, but four other companies bearing the Adani name continued to fall.
The mixed response from stock investors came the day after some of Adani’s controlling shareholders promised to make early repayment of a $1.1 billion loan that was backed by three of the companies’ shares.
The repayment announcement and the relatively positive sentiment from earnings results of Adani-linked companies this week led to the better performance in share prices, said Avinash Gorakshakar, head of research at India-based Profitmart Securities. But he said “today’s swing can’t change the companies’ fundamentals,” pointing to the recent cancellation of a share sale and the likelihood that Adani companies would find it tough to raise money in the debt markets.
Adani Group’s combined market capitalization had been declining rapidly since New York-based short seller Hindenburg Research published its report Jan. 24. The firm alleged that Mr. Adani and his group had manipulated stock prices, among other things. Adani Group has denied the allegations.
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Adani Ports & Special Economic Zone reported on Tuesday that net income had fallen 13% from a year ago to about $161.5 million, for the third quarter ended December. The company plans to repay debt of about $604.2 million over the next financial year. The repayment is expected to improve its net debt to earnings before interest, taxes, depreciation and amortization ratio to about 2.5 times, it said in the report.
Adani Green Energy Ltd
net profits more than doubled to $12.4 million over the same period, compared with $5.9 million a year ago, according to the company’s results on Tuesday.
Ambuja Cements Ltd
which Adani acquired last year with the help of foreign bank financing, released its own earnings after the market closed. Its net profits were around the equivalent of about $59 million, up around 13% on the year before, while its revenues were around 4% higher.
The companies followed Adani Transmission
which released its own quarterly results after the market close Monday showing both revenue and profit rose by double digits.
Adani Enterprises, the flagship company in Mr. Adani’s business empire, is scheduled to release its earnings results next Tuesday, according to a stock exchange filing.
The seven companies bearing the Adani name were valued at $217 billion, based on Tuesday’s exchange rates, before the Hindenburg report was published. That valuation fell as low as $105 billion by Monday’s close, although it recovered slightly to $106 billion Tuesday.
The market rout forced Adani Enterprises to call off a fully-subscribed secondary share sale last week, after share prices fell far below what early investors had pledged to pay. The company said it would refund those who subscribed to the offering.
Mr. Adani’s personal wealth has been on a similar trajectory. The 60-year-old tycoon was once the world’s second-richest man, according to the Bloomberg Billionaires Index. His wealth has more than halved to $56.4 billion as of Monday.