Adani Group companies share have been in the news for the last few days. Earlier Adani Group companies came in the headlines because their shares saw a lot of jump. Adani Group companies played an important role in taking the Indian stock market up in the aftermath of the Corona virus epidemic. But after this there was a tremendous decline in the companies of Adani Group.
The media report alleged that the investors who have invested in the companies of Adani Group have committed huge irregularities. However, these reports were later refuted by the Adani Group. But almost no legal action has been taken by the Adani Group against the companies in which this reporting was done.
However, Adani Group spokesperson said that we are taking legal advice. But later the company did not give any information about what happened to this legal advice. In such a situation, the question arises whether you should invest in Adani Group companies? Adani Group companies have seen a recovery after the recent steep fall. But some such media reports are also coming which are once again cautioning the investors.
Business model of Adani group companies
If you see the business model of Adani Group companies, then all these companies run according to government help and government schemes. What it is meant to say here is that the companies in the Adani Group are formed according to government policies. For example, when the government announced that airports would now be sold to private companies. After this, the Adani Ports and Airport Company was created in the Adani Group. Adani Renewable Energy and other companies were formed on this basis.
To build most of the companies in the Adani Group, it has taken the help of debt. So it is a matter of concern for investors. Due to continuous borrowing by the Adani Group, the total debt on the group companies has exceeded Rs 140,000 crore. In the recently held AGM of the Adani Group, Gautam Adani said that there was wrong reporting by some media organizations against the group companies. Due to this, there was a huge volatility in the shares of the company. This affected our small investors. However, this will not have any impact on the company’s growth in the long run.
Challenges For Adani Group
Before you should buy the shares of Adani Group or not, we need to know that, what are the challenges faced by the Adani Group? Recently it was reported in the media that Adani Group has told the Airport Authority of India that it does not want to take over Pune, Jaipur, Thiruvananthapuram airports. Whose bidding she has won recently. For this, some more time has been sought from the Airport Authority of India in Adani Group.
The reason behind this is being told due to the reduced passenger load due to Corona virus. The Adani Group already has a lot of debt. In such a situation, the Adani Group no longer wants to fall into the trap of more debt by taking the new airports under its control. Apart from this, the Mumbai airport has also been taken over by the Adani Group. For this, Adani Group will have to repay a debt of more than Rs 8000 crore. Which was with JVK Group. It is being said in the report that for this reason in GVK Group, Adani Group was sold to Mumbai Airport.
Adani Group is now in talks with banks for a loan of about Rs 12000 crore. At what stage has this thing reached so far? There is no information about this. But one thing becomes clear here that the difficulties of Adani Group are not going to reduce in the coming time. At the same time, Adani Group is getting constant challenges from Reliance Group. Adani Group’s troubles may increase further in the coming times due to heavy debt.
However, at the recently held Adani Group AGM, Adani Group promoter Gautam Adani said that our companies have given returns of more than 100% to their investors in 1 year. But here one thing is also to be seen that there has been a huge decline in the shares of the group. However, recovery has definitely started in some companies. But still there is a decline in it. So how long will this decline continue? Nothing can be said about it as of now.
At the same time, cash flow of most of the companies of Adani Group remains negative. Which is a matter of concern for investors. The same experts say that Adani Group’s cash flow will turn positive in the coming years! There is no guarantee of this. If the debt on Adani Group continues to increase, then the difficulties of Adani Group will increase further.
Adani Group’s airport business is also going through difficult times. Although the cases of corona virus have definitely decreased in India. But experts say that so far the second wave of corona virus has not gone completely. At the same time, in states like Maharashtra, Kerala, there has been an increase in the cases of coronavirus once again. Which is a matter of concern. This will reduce the passenger load and this will also affect the revenue of Adani Group. Experts say that the third wave of corona virus can also enter the country by October. Due to this, if the operation of air traffic is stopped once again, the difficulties of Adani Group will increase in the coming days.
Difficult for Adani Group in the field of renewable energy
At present, the total capacity of Adani Group is 3245 MW. This entire energy is generated from Adani Group solar panels and on the second day from a couple of sources. It is not that there is no opportunity for Adani Group in the renewable energy sector. But now the entry of Reliance Group and Tata Group has increased the difficulties of Adani Group.
Recently, Reliance Group Chairman Mukesh Ambani had announced that he is going to enter the field of renewable energy. For this, Reliance has decided to invest an initial Rs 75,000 crore. With this investment, Adani Group will set up 3 Giga factories in Jamnagar, Gujarat. From which solar modules will be manufactured. And solar energy will be generated. For this, partnership with local people can also be done. Apart from this, battery manufacturing and other renewable equipment will also be manufactured by Reliance Group. This is going to have a direct impact on the Adani Group.
Adani Renewable Energy, a company of the Adani Group, also operates in this area. In such a situation, there can be a strong competition in India between the two companies. This will significantly reduce the cost of renewable energy. One good thing for Reliance is that their cash flow is positive. And so far the company has become a company with net zero debt. The same Adani Group currently has a huge amount of debt. In such a situation, experts doubt whether Adani Group will be able to compete with Reliance Group in the coming times.
At the same time, Tata Group, which is included in the country’s largest conglomerate, has also decided to step into the field of renewable energy. Recently, the Tata Group announced that they would manufacture batteries for electric vehicles. Apart from this, the Tata Group is already involved in the energy sector in the country under the name of Tata Power. The Tata Group will also develop its capabilities in the coming days. This will increase the competition for Adani Group even more.
If we talk about the international market, the development of renewable energy seems to be happening all over the world. Recently the European Union announced that Europe would be made self-sufficient in the field of renewable energy. For this, $1 trillion will be invested in the coming years. At the same time, US President Joe Biden has also decided to make America self-reliant in the field of renewable energy. For this, he has decided to invest 100 billion-dollar in the field of renewable energy. The US can also increase this investment as per the need.
On the other hand, if we talk about the Gulf countries, they have also stepped up in the renewable energy sector. All the Gulf countries, including Saudi Arabia, have decided to invest huge amounts in their own for the production of more hydrogen gas. It comes to know only one thing that the difficulties for the Adani Group are not going to reduce in the coming days. Internationally too, the Adani Group will face stiff competition in the renewable energy sector. Apart from India’s Reliance and Tata Group, the Adani Group will also face competition from other companies.
Should you buy shares of Adani Group companies?
For some time now, there has been a lot of volatility in the shares of Adani Group companies. However, for the last few days, there is a recovery in the shares of Adani Group. But today again the shares of Adani Group companies are negative and closed at lower levels. Some experts are seeing this as an opportunity. Experts say that Adani Group companies can be bought at this time. If you are looking to invest in Adani Group companies for a long term, then this can be a good opportunity for you. However, experts are also warning that you should avoid investing your entire investment in Adani Group companies. This will reduce your risk. The rising debt on the Adani Group companies has also made experts worried. Experts say that the business of Adani Group companies will depend on how Adani Group handles its debt.
After the AGM of Adani Group, the shares of Adani Group companies have seen a decline. Which is not a good sign for the company. In such a situation, if you are a retail investor and want to invest in Adani Group companies for a short time, then this time is not right for you. Once there was a good recovery in Adani Group companies. After that you can buy shares of Adani Group companies.
It is true that for some time now, there has been a recovery in Adani Group companies. But we must not forget that Adani Group companies are still trading below their peak levels. And it has seen ups and downs simultaneously for the last few days. In such a situation, it would not be right to invest money in any such business. in which there are great fluctuations. Due to this there is always a risk of losing the money of the investors. In such a situation, if you are not ready to take the risk, then you should not buy the shares of Adani Group companies. There are many other good companies in the market. in which you can invest money.
If we talk about the performance of Adani Group companies in the stock market today, then all the companies have seen a decline from 1 to 2%. In the past, there was a lower circuit in Adani Power and other companies for more than 1 week in a row. However today that has not happened. But still, the period of decline continues in the companies of Adani Group. Which may still go on for a long time.
Even Adani Enterprises, the flagship company of Adan Group, has seen a decline of about 1% today.