How did Adani become hot stock that grew exponentially during lockdown?
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- Updated On:25-May-2021
- Replies:2
Short Answer
Adani has greatly diversified its involvements from not only in ports but then in running airports, energy sectors, and warehousing activities as well. As a result, it has been one of the greatest attributions towards its massive growth in the country in 2020.
Detailed Answer
Hearing that a company gained a market capitalization of 455 percent in a single year might seem a bit farfetched, but then this is one of the many staggering numbers that are by the Adani group. From being a mid-sized company to directly competing with Reliance, TATA, Infosys, TCS, and so on, the company has come far and long in creating an impact on and baffle investors and analysts in the company rise to fame. While having the third biggest market capitalization in the market, the company has given rise to the second wealthiest man in the country, Gautam Adani.
From ports, airports, energy, transmissions, and so on, Adani Group has its fair share of involvement In all major playing fields. But when you look at the rallying of the prices exponentially, you start to wonder how this mid-size market capped company made an impact in the country and became so affluent and powerful in such little time. to understand the factors behind this, we have illustrated them in detail below.
Adani Stock Price - Factors for the rallying of the prices
• The major reason behind the rallying of its stock prices has to be its real estate acquisitions. The ports that it has acquired and the power sectors set up. While the ports that the company has acquired has bought an insignificant change in their stock prices, the power plants set up for the same saw Adani Green shoot to power over a small period, winning the world's largest tender for setting up solar panels in the country worth billions of dollars.
• Another key reason behind the incremental rise would be attributed to the country's leasing of international and national airports. To date, the company has well over seven airports under them while aims to bag more.
• Consequently, the company is quite broadly diversified, and each sector of the company has contributed equally towards its exponential rise in valuation.
Bottom line
The Adani group has been quite influential in the country throughout 2020 as it has seen a tremendous rise in its valuation and market capitalization. Moreover, their port business, along with their leasing of international and national airports for more than 50 years and their surplus endeavors in the power generation sector, has seen the company soar in valuations profiting investors and other traders.
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Harshil Patel
Almost every stock of the Adani group has seen an exponential rise. But then the major contributing factor to this has to be its constant acquiring of ports and airports in the country. With these profitable investments, there's no saying where the stock might be in the next 3-5 years.