Adani Power is a 'formidable coal franchise', Morgan Stanley says, share price surges

Morgan Stanley has begun coverage on Adani Power with an ‘overweight’ rating, claiming it is a strong turnaround in India’s corporate history.

Following Morgan Stanley initiating coverage on the stock, Adani Power shares were up on Friday said to have a “formidable coal franchise” and an overweight rating.

Adani Power rose as much as 8.80% to ₹686.95 a share, on the National Stock Exchange, while the ordinary NSE Nifty 50 index was trading down half-a-percent.

The stock move was symptomatic of Adani Group stocks, that were generally up anywhere from 1% to 10%, meanwhile, amid some of the clearing of SEBI’s order in the Adani-Hindenburg case.

“Adani Power is a good example of a turnaround in India’s corporate history with significant resolution on most of the regulatory issues in addition to several value-accretive acquisitions,” Girish Achhipalia, Amit Bhinde and Pranjal Jain, analysts with Morgan Stanley India Co. Pvt. Ltd. wrote in a note.

“Adani Power is expected to see significant earnings growth, as there are tailwinds from the increased pace of execution of projects and the signing of additional power purchase agreements in the medium term.”

Adani Group Stocks

Adani Group shares were up between 1% and 10% on Friday, after the Securities and Exchange Board of India findings, which dismissed some of Hindenburg Research’s allegations and cleared the ports-to-mining conglomerate of some complaints.

"SEBI has reaffirmed what we've always said that the Hindenburg allegations were unfounded," wrote Adani Group Chairman Gautam Adani on X, previously Twitter, when the SEBI orders were issued said. "The Adani Group has always been marked by transparency and integrity."

In 2023, SEBI started its investigation into the Adani-Hindenburg case after a US-based short seller asserted that the Adani Group had utilized tax shelters and obscured related party transactions. The accusations, which the Consortium denied, led to a $150 billion decline in the group's market value at the time, although many of its stocks have increased in value since then.