What NEXT for ADANI Group Companies?

 10^th February 2023

What NEXT for ADANI Group Companies?

Dear Fellow Investors,

Namaste! In the last three days 2 major development took place. Adani Shares moved for the 2 days on 7^th and 8^th February. They moved up so fast that Adani Enterprises shares moved up by 100% from the bottom of Rs.1000 something. 2^nd development is Adani is making premature payments to some of the loans or obligations. Looking at this positive developments – many readers have asked our view. We are replying the same.

What is my observation from 1992 onward?

I had started my career in stock market when the HARSHAD MEHTA scam was broken out. When I look back, I feel, I was blessed to start my career in the worst of the time. Everybody in my family was against as the NOISE of the SCAM was very much at that time. In my three decades experience in the market I have observed following.

1.   In 1992, the theme was Cost Replacement - Mr. Harshad Mehta arrived the price of ACC Rs.10000 based on his theory and market also believed him. What happened to the prices of Mazda, ACC and all other companies since then you know.

2.   In 1994, when first time FII investments were allowed, the sectors were capital goods and PSU IPOs. In 1995-96, the market was flooded with IPO of finance companies. The costliest IPO was of VLS Finance at Rs.510 per share. All listed companies started their finance companies. CIPLA started ALPIC Finance. I do not know what these companies are doing now.

3.   1997 was the year for FMCG and Pharma companies. Hindustan Lever, Ponds, ITC, Colgate and Pharma companies were the darling of the market. Since then ITC or Hindustan lever or Colgate took 10 years to give positive returns.

4.   1999-2000 were the year of IT and famous K-10 stocks. HFCL quoted at Rs.2100 is available at Rs.20 now. DSQ Software, Silverline are difficult to find now. Even Infosys price of Rs.16000 per shares took 7 years and two bonuses to match.

5.   2003-2007 were the years of Infrastructure, Housing, Capital goods & electric goods sector. Just see what is the position of housing and infra companies today? Where is DLF and UNITECH and JP group shares now?

6.   From 2009 to 2020 – we have seen various sectors are moving one after another but the top prices touched by one sector group companies’ takes time to come or never comes if the fundamentals of the companies are doubtful. Many companies have vanished.

What happens to the flame of the LAMP when it is about to get extinguished?

It burns with more bright light and we feel that the LAMP will last little longer. But in some minutes only the lamp gets extinguished.

The same way the stocks moves up faster when all the positive news and supportive environments are there. People come and buy. Those who have bought at the start sells and do the retailing to the smaller investors and the stock keeps on moving up. But when the same situations changes due to various reasons – the teji unfolds and people start selling.

Those who have bought at the top gets trapped. They can’t sell. So, to trap them more – SUCKERS RALLY comes in the market. Say somebody has bought ADANI ENERPRISES at Rs.4000 from the market. He could not sell and the price came to Rs.1000 odd. Now the rally starts and he see the prices are moving up one side. In just two days the prices touched to Rs.2000. He will think to average. He will think that if he buys at Rs.2000 and sell at Rs.3000 he can recover his losses. He is trapped again in this sucker rally. See the prices on the 9^th Feb. This kind of movement will keep on happening.

What is the most likely scenario?

Market is more creative than any individual and it can surprise anybody. I am ready to go wrong in whatever I am going to share now. But, see that as a mere possibility. I am not giving any advice or astrological call.

All ADANI companies will move in SIDE WAYS for coming time. It may move the way it moved on 7-8^th Feb and it may fall the way it came down on 9^th Feb. The big guys will sell their remaining shares in this sideways movements and novice investors will buy them assuming they are getting good discount.

Since ADANI JI is committed to investors – he will sell some of his companies – may be AMBUJA and ACC to some other guys to clear the DEBTS. Till the AUDIT reports are out – he may find it difficult to sell his company’s shares to the market or foreign investors. Yesterday, TOTAL ENERGIES announced their plan to invest in HYDROGEN project with ADANI on hold. So, to sell the existing companies or to sell the stake of existing companies is not going to be possible. Under the circumstances all the growth plans will not move at the speed that was earlier planned. In other words – the stocks will not move!!

What was our ASTRO-CALL on ADANI JI?

On 25^th January 2023 this was the post.

Hindenburg Research Report on Adani Group. What is Astrological View?

In the same following was categorically said - Ketu in 7^th House making triangle with Saturn: - He will have problems with the team members or partners. He will have difficulty in getting easy support from them. Many people will leave his organization or cut the ties with his companies.

Total energy was the first to announce the stoppage of their tie ups. ( see the accuracy of astrology).

The way OPPOSITION is making a NOISE on MODI JI – if at all MODI JI wants to support (as the oppositions guys are making a case) – he will not support till the 2024 elections are over.

So, as per astrology also – there is very less chances of miracles happening with ADANI JI.

How do we see the LARGER PICTURE?

Somebody was selling the ADANI GROUP SHARES from OCTOBER 2022 onward. We have already shared our research on the same. There can be many reasons. We don’t know which one is the only reason. But we are sharing some of the probable reasons. May be all or some of them would be applicable.

1.   May be to book profit as he/they would have felt that shares are over -valued.

2.   May be collecting funds to apply in the FPO.

3.   May be to short sell and make huge profit when the report comes out. Because Hindenburg was preparing report from long time and  many people would be knowing about that. At least his team members must be knowing about this research happening in his office. They might have leaked these information to sellers.  

4.   May be to sell the shares when the going is good and keep the money for some future needs.

There can be many other possibilities also. I am sure SEBI or JPC (if allowed) will find out the real reason and culprit someday.

What NEXT?

I maintain my original call on ADANI JI. He is a fighter and he will keep on fighting. I wish him all the best.

Follow me on Twitter @hiteshmparikh /  WhatsApp - +91-9869425399.

Learn a Lesson. Live with Passion & Invest with Reason.

 

Hitesh Parikh.