Incumbency wave in India, Australia boosts stocks of Adani group

Shares of Adani Enterprises have risen by about 170 per cent since Modi assumed power, compared to around 40 per cent under the previous Congress-led regime

Shares in various Adani Group companies, including those of flagship Adani Enterprises Ltd, surged on Monday after exit polls predicted Indian Prime Minister Narendra Modi would return to power, even as Australian poll results also spelled good news for the Indian conglomerate.

Adani Enterprises rose as much as 29 per cent in afternoon trade, its sharpest intraday gain in over two years. Other Adani Group stocks such as Adani Power, Adani Gas and Adani Green Energy Ltd were all up more than 15 per cent in afternoon trading.

The rally in Adani stocks outshone a broader market rally, which saw the NSE index close 3.7 per cent higher at 11,828.25 points, while the benchmark BSE index was 3.8 per cent higher at 39,352.67 points.

Billionaire Gautam Adani's rapid ascent to the top tier of Indian business is often associated with the rise of Modi, who is also from the western state of Gujarat.

Shares of Adani Enterprises have risen by about 170 per cent since Modi assumed power, compared to around 40 per cent under the previous Congress-led regime.

Analysts say Adani Group's rally on Monday was in line with the euphoria in Indian markets, but did not specify why the group's stocks did so much better than the broader market.

"It is broadly an election-based rally. People are expecting reforms on the infrastructure side to continue," said an analyst covering Adani Ports, which rose more than 10 per cent.

Adani's empire, which includes billions of dollars worth of investments in mining, ports, trading, electricity and gas among other things, has benefited from Modi's emphasis on economic development. The business tycoon has in the past brushed off any notions that he has been granted undue favours.

Separately, news that Australia's conservative coalition has swept back to power with an outright majority also boded well for Adani Mining Australia, which has been struggling for years to kick off its ambitious Carmichael coal mine project in Queensland due to environmental concerns.

Adani Mining Australia used the election results to slam the labor government in the state, saying the poll verdict reflected public consensus on the mine.

"Let's hope they (Queensland state government) realise it is time to start listening to the people of Queensland," Lucas Dow, Chief Executive of Adani Mining, said in a statement.