Adani Power share price: Shares of Adani group company – Adani Power – came under selling pressure on Tuesday, September 23, as investors booked profits following a stellar run in the counter amid a host of multiple cues in the last three trading sessions.
Adani Power share price fell as much as 5.8%, hitting an intraday low of ₹160.20 on the BSE, a day after the record date for its 1:5 stock split.
The decline appears to be driven by profit booking, after the stock surged over 32% in just three sessions, including hitting the 20% upper circuit in the previous trading session.
Sebi clean chit
The optimism in the counter had mainly been driven by India’s market regulator, Securities and Exchange Board of India (Sebi), dismissal of Hindenburg Research’s allegations against the conglomerate and its billionaire founder, Gautam Adani.
Meanwhile, a Bloomberg News report stated fresh buying by SBI Mutual Fund and Citadel Securities in Adani Power, even as GQG Partners trimmed its stake, further boosting the company’s shares.
Adani Power 1:5 stock split
Additionally, the 1:5 stock split of Adani Power shares, which resulted in the subdivision of one share into five, increased the number of shares outstanding while reducing the price per share, keeping the market capitalisation unchanged.
A stock split generally helps to boost the liquidity in a particular counter while making it more accessible for smaller retail investors.
Positive brokerage view
Positive views from global brokerage Morgan Stanley also boosted investor confidence. The brokerage, last week, initiated coverage on Adani Power stock with an ‘Overweight’ rating and set a price target of ₹818 apiece. The brokerage not only reaffirmed its confidence in the company but also described it as its “Top Pick” in the utilities sector.
Morgan Stanley said Adani Power is at the centre of one of India’s most significant corporate revival stories, citing the resolution of regulatory issues and value-accretive acquisitions. The brokerage noted, “APL is a good illustration of turnaround in India’s corporate history, with resolution on most regulatory issues & multiple value-accretive acquisitions.”
As of 11.05 am, Adani Power share price was trading at ₹165.15, down 2.94%.