Adani Enterprises stock may jump nearly 40%; know why

Chart patterns show that bulls may be eyeing ₹1,900 – nearly 40 per cent higher than yesterday’s close – so long as they’re able to hold the stock above critical support at almost ₹1,400.

“Technical factors are suggesting a strong counter trend move in Adani Enterprises,” said Anuj Dixit, vice president of equity research at Mumbai-based Sovereign Global Markets Pvt Ltd.

“There is potential for further rally in the stock as the bullish engulfing pattern is supported by high volumes,” Dixit said.

The recovery that began Tuesday saw the stock end the session with a so-called “bullish engulfing” pattern. Also, yesterday’s volume on the NSE stood at nearly 340 lakh shares, about 2.4 times the 20-day average and the highest since 3 February, when 439 lakh shares traded on the day of crash lows.

All 10 stocks of the ports-to-power Adani Group closed higher, the first such occurrence since the bombshell report by US-based short-seller Hindenburg Research on 24 January sparked an unprecedented rout in the empire’s shares.

Adani Total Gas climbed 4.9 per cent, ending a 26-session losing streak.

The conglomerate has lost about $145 billion of its market capitalization since the report that alleged accounting fraud and stock manipulation.

Adani, led by billionaire Gautam Adani, has rejected the allegations and denied any wrongdoing.

The Adani Group companies have recouped some losses this week after the ports-to-airport conglomerate’s management kicked off roadshows in Singapore and Hong Kong to shore up investor confidence in the crisis-ridden empire.

The group said that it has sufficient cash to prepay a lot of debts, including onshore bonds, and it has started doing that already.

Meanwhile, Adani Group has told creditors it has secured a $3 billion loan from a sovereign wealth fund. The credit line from the sovereign wealth fund could be increased to $5 billion, according to a Reuters report.

The news of Adani securing fresh credit comes a day after group management told bondholders it expected to prepay or repay share-backed loans worth $690 million to $790 million by March-end.