Sharp Contrast: Adani Group Companies’ Valuation Plunges by 50%, Outpacing Meager 6% Decline in Top 500 Firms: Analysis
Adani Group’s Companies Witness Steep Value Declines Compared to Top 500 Firms: Research Findings
According to a recent report by Axis Bank’s Burgundy Private and Hurun India, the valuation of Adani Group’s eight companies has plummeted by over 50% in the six-month period ending in April 2023. This stands in stark contrast to the mere 6% decline experienced by the top 500 non-government companies. Adani Total Gas recorded a massive 73.8% loss in value, while Adani Transmission saw a decline of 69.2%, and Adani Green Energy was down by 54.7%.
The combined value of Adani Group’s eight companies, amounting to Rs 9.5 lakh crore, represents 4.5% of the total value of the top 500 companies. During the review period, these companies witnessed a decline of 52% or Rs 10.25 lakh crore in value, significantly outpacing the 6% decline observed among the top 500 firms.
The report also highlights that both Adani Enterprises and Adani Total Gas dropped out of the list of the top 10 most valuable firms during this period. It is worth noting that in late January, a US-based short-seller released a damning report alleging governance issues and other deficiencies within the Adani Group, resulting in a substantial drop in the share prices of its listed entities. However, the group’s founder, Gautam Adani, has vehemently denied any wrongdoing.
Despite a 5.1% decline, Reliance Industries retained its position as the most valuable Indian company with a valuation of Rs 16.3 lakh crore. It was followed by Tata Consultancy Services at Rs 11.8 lakh crore and HDFC Bank at Rs 9.4 lakh crore.
The overall value of the top 500 companies marginally decreased by 6.4% from Rs 227 lakh crore to Rs 212 lakh crore as of October 30, 2022. Interestingly, these companies underperformed when compared to benchmarks such as the 30-share Sensex, which remained relatively flat over the six-month period.
The report also highlights the decline in valuation for certain prominent entities. Unlisted vaccine manufacturer Serum Institute of India experienced a 13% decrease in its valuation, amounting to Rs 1.92 lakh crore. Among the listed unicorns, Nykaa, Zomato, Paytm, and Policybazaar collectively witnessed a decline of Rs 7,872 crore in their valuations during the review period.
To qualify for inclusion in the top 500 non-state-owned companies, entities needed to have a valuation exceeding Rs 5,500 crore or USD 672 million.
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