Adani Power rallies 20% post 1:5 stock split; Sebi relief, analysts call lift sentiment

Shares of Adani Power Ltd surged 20% on Monday, September 22, after the stock began trading on an adjusted basis following its first-ever share split. The rally came as investor sentiment toward the Adani Group improved, with market regulator Sebi dismissing key allegations of stock manipulation brought by US-based short-seller Hindenburg Research.Adani Power had announced in June that it would split one equity share of ₹10 face value into five shares of ₹2 each. The board approved the sub-division in August, setting September 22 as the record date for eligibility.The stock split does not change the overall value of investor holdings but increases liquidity by expanding the number of shares available for trading. For instance, an investor holding 10 shares priced at ₹100 each will now own 50 shares worth ₹20 each, keeping the total value unchanged at ₹1,000.Morgan Stanley turns bullish on Adani Power Adding to the momentum, Morgan Stanley initiated coverage on Adani Power with an ‘overweight’ rating, calling it a “good illustration of turnaround in India’s corporate history.” The brokerage named the utility as its top pick within the sector, citing strong earnings potential from timely project completions and additional power purchase agreements in the medium term.Other Adani stocks also rallied. Adani Total Gas gained 17.5% to ₹765, Adani Green Energy rose 8.15% to ₹1,114, and Adani Energy Solutions, Adani Enterprises, Adani Ports & SEZ, ACC, Ambuja Cements and Adani Wilmar advanced between 1% and 7%.Sebi clears Adani Group of Hindenburg allegationsThe latest surge in Adani stocks follows Friday’s rally after Sebi concluded its long-running probe into Hindenburg’s allegations of insider trading and market manipulation.In two detailed orders, the regulator said the allegations were unsubstantiated after reviewing loan transactions, public shareholding norms, and substantial acquisitions. Sebi accepted Adani Group’s explanation that the transactions in question were legitimate business dealings, with all loans repaid with interest before the investigation began.The regulator found no evidence of fund diversion or misleading acquisitions that would warrant penalties or liability for the group or its executives.Outlook for Adani sharesThe clean regulatory outcome removes a major overhang on Adani Group companies, which had faced sharp volatility since Hindenburg’s January 2023 report. With brokerages such as Morgan Stanley and Jefferies backing Adani Power, Adani Green, and Adani Enterprises, investor sentiment has strengthened.Jefferies maintained a ‘Buy’ on Adani Enterprises with a raised target of ₹3,000, implying nearly 19% upside, while reiterating a ‘Buy’ on Adani Green with a target of ₹1,300.For now, the combination of Sebi’s clearance, positive brokerage calls, and Adani Power’s stock split has reignited momentum in the group’s counters, though analysts caution that earnings delivery will be key to sustaining the rally.The post Adani Power rallies 20% post 1:5 stock split; Sebi relief, analysts call lift sentiment appeared first on Invezz