Adani Enterprises hits new high, surpasses LIC, ITC in market cap ranking

Adani Enterprises surpassed the state-owned insurance giant of India (LIC) and fast moving consumer goods (FMCG) company ITC to become most valuable stock in terms of (market cap) after a strong rally in the Gautam Adani’s Group company.

At 09:30 am, with a market cap of Rs 4.31 trillion, Adani Enterprises stood at the 12th position in the overall market cap ranking, the BSE data shows. LIC stands at 13th with Rs 4.23 trillion market cap and ITC at number 14th position (Rs 4.13 trillion market cap), data shows.

Shares of Adani Enterprises continued its upward march with the stock hitting a new high at Rs 3,865.60, on rallying 3 per cent in Friday’s intra-day trade. Thereafter, the stock has pared gains, and was up 0.2 per cent at Rs 3,757.55, as compared to 0.54 per cent decline in the S&P BSE Sensex.

Thus far in the month of September, Adani Enterprises has seen its market value appreciate by 21 per cent after the National Stock Exchange (NSE) announced the company’s inclusion in the benchmark Nifty 50 index. In comparison, the Nifty 50 index was up marginally by 0.01 per cent during the same period. Adani Enterprises will join the benchmark index, the most tracked stocks gauge in the country, from September 30 in place of Shree Cement.

Adani Enterprises, the flagship Group company, is one of the fastest growing diversified businesses that provide an extensive range of products and services. The company operates as an incubator, establishing new businesses in transport and logistics, and energy & utility sectors, apart from increasing focus on direct-to-consumer businesses. The company is leading decarbonization initiative of industries and mobility through Adani New Industries Limited (ANIL).

The completion of the capex at Australia mining and railway subsidiaries followed by commencement of trial runs in February 2022 considerably mitigates the project implementation risk in Australia. Nevertheless, ramping up of coal dispatches as envisaged remains crucial from the credit perspective, CARE Ratings had said in rationale.

The rating agency expects full recovery in the domestic traffic by June 2022 and the recovery in the international traffic by early FY24 assuming no major impact of the further waves of COVID. Going forward, achievability of envisaged non-aero revenues shall be crucial.

The ratings continue to derive strength from Adani Enterprises’ leading position in the coal trading business and ramp-up in the operations of high profit margin mining services segment during FY21 and FY22. Healthy outstanding order book position in the road segment after securing large toll roads and hybrid annuity model (HAM) projects improve the revenue visibility for the contracting segment in the near to medium term, the rating agency said in its June 2022 report.

In the past three months, Adani Enterprises has zoomed 80 per cent, as compared to 16 per cent rise in the S&P BSE Sensex. Further, in the past six months, it more-than-doubled or surged 113 per cent, as against 5 per cent gain in the benchmark index.

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