Corona warriors for markets: Ambani, Adani stocks rise most since lockdown

Eight leading promoter-controlled business houses have emerged as the new Corona warriors for the stock market, with their group market capitalisation rising faster than the 23 per cent gain for the entire universe of companies listed on the BSE.

 

Of these, six have outperformed the broad market substantially. They are the Mukesh Ambani, Bharti, Adani, Sun Pharma, Vedanta, and Shiv Nadar groups, clocking 30 per cent plus gains.

 

The Aditya Birla and Radhakishan Damani groups too have beaten the average increase since the lockdown. Growth has been calculated on the basis of the market cap of all the listed companies of these groups as on March 23, the day before the Central government announced the nationwide lockdown, compared to what it was on Thursday.

 

The Bajaj group is the only one on the list of 12 conglomerates to be down — 1 per cent — since the lockdown came into effect, thanks to the hammering of stocks of non-banking financial companies.

 

That impacted Bajaj Finance and Bajaj Finserv, even as Bajaj Auto, despite not being able to produce vehicles during the lockdown, saw its market cap go up by 34 per cent.

 

Two of the four leaders of the pack are promoter groups with a large stake in the telecom business, for which they seem to be getting substantial value.

 

Ambani is the winner by a wide margin with 78 per cent appreciation, thanks to the aggressive and successful fund-raising programme during the lockdown. Reliance Industries’ subsidiary Jio Platforms raised Rs 78,562 crore in Jio Platforms for a 17.2 per cent stake at a valuation of around Rs 4.9 trillion from marquee investors including Facebook. It is also going through a rights issue, through which it will be raising Rs 53,124 crore.

 

The telecom business has bucked the trend during the lockdown, and has seen a 15 per cent increase in data usage, owing to work from home becoming the new norm. As a result, average revenue per user is moving up and is expected to hit Rs 200 in a few quarters. Bharti Airtel has leveraged this opportunity, especially after it earlier raised $3 billion through a qualified institutional placement and an overseas bond issue, and the market has cheered the stock with the group shares rising 41 per cent, coming in at fourth place.

 

The Adani group, which saw the second-highest appreciation among business houses, has seen a sharp rise in the prices of both Adani Ports and Adani Green. The rally in the pharmaceutical sector amid the Covid pandemic has helped Sun Pharma promoter Dilip Shanghvi gain a 42 per cent appreciation in stock prices.

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Anil Agarwal-controlled Vedanta Ltd, the flagship company of the group, has seen its share price spiral up as a result of its announcement this month to delist itself.

 

The Shiv Nadar group has seen a 30 per cent appreciation in market value.

 

Professionally-run groups such as HDFC and ICICI Bank and groups with a market capitalisation below Rs 1 trillion were excluded from this analysis.

 

 



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