Over the first eleven months of 2024, Adani Ports handled 293.7 MMT of cargo, reflecting a 7% growth compared to the same period last year. Additionally, its logistics rail volume increased by 10% during this period.
In other developments, several entities connected to Adani Group have approached the Securities and Exchange Board of India (Sebi) seeking settlement in a case that alleges violations of public shareholding norms through unfair practices at four listed companies of the infrastructure conglomerate.
Emerging India Focus Funds (EIFF), a Mauritius-based foreign portfolio investor (FPI) that Sebi alleges is linked to Vinod Adani, the older half-brother of Gautam Adani, last week proposed a settlement amount of Rs 28 lakh, according to documents reviewed by ET.
These settlement proposals were submitted in response to a September 27 show cause notice issued by the regulatory body. Settlement applications do not amount to an admission or denial of guilt.
While ET is aware of applications by four entities, it’s possible that all Adani entities involved have filed for settlement, since legal strategy tends to be formed at a group level.The four listed companies under scrutiny are Adani Enterprises, Adani Power, Adani Ports and Special Economic Zone, and Adani Energy Solutions (formerly Adani Transmission).Also Read: Jefferies’ bullish call drives gains in cement stocks
Adani Ports also saw a rally following a credit rating upgrade for Gopalpur Ports Limited (GPL). Rating agency CareEdge revised GPL’s credit rating from “BBB” (RWP) to “AA/Stable,” an upgrade of six notches, after Adani Ports acquired GPL in March 2024.
The upgrade is following the subsequent prepayment of 64% of external debt supported by funds infusion from APSEZ. GPL’s term loans of Rs 443.70 crore and Rs 413.30 crore from Canara Bank and Yes Bank, respectively, have been fully prepaid, strengthening its debt coverage indicators.
Additionally, Bernstein recently highlighted a significant reduction in share pledges by the Adani Group. Adani Ports, in particular, saw its promoter pledge drop from 17% to zero over the past 1.5 years. This shift is part of a broader reduction in pledged shares across the Adani Group, including a decrease in Adani Power’s pledged shares from 25% to just 1%. This move is seen as a significant step in addressing investor concerns about the risks of pledged shares and reflects positively on the group’s financial strategies.
In terms of valuations, Adani Ports continues to trade below peers like JSW Infrastructure and Concor, despite recent improvements. Bernstein maintains an ‘Outperform’ rating on Adani Ports, with a target price of Rs 1,616.
Motilal Oswal also maintains a Buy rating on Adani Ports & SEZ (ADSEZ) with a target price of Rs 1,530, indicating a potential upside of 25% from the last traded price of Rs 1,215. The firm believes that ADSEZ is well-positioned to continue outpacing industry growth and gaining market share. Its integration of logistics with port operations is enhancing service offerings, transforming the company into a comprehensive transport utility.
Motilal Oswal projects a 10% growth in cargo volumes over FY24-27, which is expected to drive a 15% CAGR in revenue and EBITDA, as well as a 21% CAGR in PAT during the same period, reflecting strong financial performance potential.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)