Is there an investment opportunity in PSP Projects shares?

The spectacular rise in wealth of the Adani Group has caught many eyeballs. In the recently released Hurun Global Rich List, Gautam Adani and family’s ranking moved up 20 places. The report also stated that his wealth almost doubled to $32 billion on the back of Adani Green Energy reaching $20bn valuation.

That’s not all. It turned out to be a goldmine for investors as five out of six Adani Group stocks listed on the exchanges have rallied over 100% in the last year. This rise has led to the market capitalisation of Adani Group jumping over 3.5 times from Rs 1.72 lakh crore on March 6, 2020 to Rs 6.30 lakh crore on March 5, 2021.

Experts believe the spate of acquisitions across verticals has led to this metaphoric rise in Adani Group stocks.

Adani Green Energy

Adani Green Energy has been the biggest gainer of Adani Group. Over the past one-year companies m-cap has swelled 8.09 times from Rs 22,662 crore to Rs 1.83 lakh crore. As the share price of the company soared 709% to Rs 1,172.75 on March 5 from Rs 114.90 on March 6, 2020. To put it in simple words Rs 10,000 invested in the company on March 6, 2020, would have grown 8.09 times to Rs 80,935 on March 5, 2021.

Commenting on the further growth opportunity, Edelweiss Securities said: “Adani Green Energy is one of the largest renewable companies in India with a current project portfolio of 14,815 MW. Given the government’s ambitious target to reach 175 GW of renewable capacity by 2022 and 400 GW by 2030, the company is favourably placed to tap into this mega opportunity. Addressing the key issue of land acquisition, Adani Green Energy has already tied up 70,000 acres. It has also identified 200,000-plus acres across India for future growth. Adani Green is favourably placed to tap into upcoming opportunities in the renewables space, given rising government focus.”

Adani Green is one of the largest renewable companies in India, with a current project portfolio of 14,815 MW. The electricity generated is supplied to central and state government entities and government-backed corporations. On the back of long-term Power Purchase Agreements (PPAs) of 25 years with central and state government entities, Adani Green has leveraged its capabilities and expanded its presence across 11 Indian states.

Adani Total Gas

Adani Total Gas the second-biggest gainer of Adani Group saw its market capitalisation soaring by 5.51 times from Rs 13,989 crore on March 6, 2020, to Rs 77,025 crore on March 5. Its shares price rose 451% from Rs 127.2 to Rs 700.35 and Rs 10,000 invested in the company has grown to Rs 55,059 in a year.

“Governments push towards clean & green fuel more usage of CNG & PNG a huge positive for city gas distributors. Going ahead gas distributing companies will witness strong volume growth with the expansion of geographical areas and new applications for the consumption of CNG in industrial areas. Gas distributors will do well over a period led by volume growth and better operating leverage reported scm should stay put as well. Going ahead, returns and cash flow will remain stable,” said Mayuresh Joshi, Head- Equity Research India of William O’Neil and Company

Adani Total Gas a joint venture of infrastructure conglomerate Adani Group and French energy giant Total, sells gas sourced from domestic fields or imported in form of LNG to automobiles as CNG or as piped natural gas to industries and household kitchens.

Adani Enterprises

The flagship company of the group Adani Enterprises entered the list of the top-50 most valuable companies in India as its market capitalisation quadrupled over the last year from Rs 23,618 crore to Rs one lakh crore. Its shares jumped from Rs 214.75 on March 6, 2020, to Rs 909.90 on March 5, 2021. Investment of Rs 10,000 is now Rs 42,370.

“Adani Group as a whole and Adani Enterprises in specific have taken a lot of calculated business risks and expanded aggressively. While some actions may look ahead of times, but the fact remains that they always tried to beat the curve and move ahead,” said Sudip Bandyopadhyay, Group Chairman of Inditrade Capital

Adani Enterprises the flagship company of the Adani Group, has a diversified portfolio of robust businesses. Mainly consisting of solar PV manufacturing, airport management, technology parks, and water infrastructure.

Adani Transmission

The market capitalization of this group company has more than tripled from Rs 25,939 crore to Rs 89,486 crore as the share price rallied from Rs 235.85 on March 6, 2020, to Rs 813.65 on March 5. Rs 10,000 invested in this company is now turned into Rs 34,498 during the same period.

“Prospects of both Transmission & Distribution (T&D) are promising with Rs 40,000 crore of upcoming transmission tenders and a potential uptick in discom privatisation. Its strong balance sheet provides room for Rs 5,000 crore Capex in transmission and Rs 1,500 to 2,000 crore in distribution business annually over the next three-five years. All in all, ATL is well-positioned to tap into upcoming opportunities in the T&D space and maintain its leadership position,” said Edelweiss Securities in a note. Adani Transmission is “Not Rated’ by Edelweiss

Adani Transmission is the largest private transmission company and operates more than 12,200 ckt km of transmission lines and around 18,000 MVA of power transformation capacity. It has further set an ambitious target to set up 20,000 circuit km of transmission lines by 2022 by leveraging both organic and inorganic growth opportunities.

Adani Ports and Special Economic Zone

The crown jewel of the group Adani Ports and Special Economic Zone has been in the news for quite some days now with the acquisition of Gangavaram Ports and fundraising from Windy Lakeside Investment. The stock has more than doubled its market capitalization in the last one year to Rs 1.52 lakh crore from Rs 69,364 crore. Its share prices jumped from Rs 341.4 on March 6, 2020, to Rs 748.95 on March 5 garnering a return of 119% or Rs 10,000 turned to Rs 21,937 during the same period.

“Infrastructure & logistics is the place to be in as the global trade opens ups. The port business has a very good EBIDTA margin & will see more traction with the current announcements.  Global trade is on the way up, despite the stock being expensive there is still room for upside and can cross Rs 1,000-mark in 2021,” said Sanjiv Bhasin, Director of IIFL Securities.

Adani Ports and Special Economic Zone Limited (APSEZ) the largest commercial ports operator in India accounts for nearly one-fourth of the cargo movement in the country. Its presence across 12 domestic ports in seven maritime states of Gujarat, Maharashtra, Goa, Kerala, Andhra Pradesh, Tamil Nadu and Odisha presents the most widespread national footprint with deepened hinterland connectivity.

Adani Power

Adani Group’s power generation also rewarded investors with 69% as its share price rise to Rs 74.35 on March 5, 2021, from Rs 44.1 on March 6, 2020. This up move in the share price saw Rs 10,000 invested in the company appreciate to Rs 16,859 and market capitalization rising from Rs 17,009 crore to Rs 28,676 crore during the same period.

“Adani Power is focusing on benefiting from the firming up of merchant prices (it has 25% merchant capacity) through the higher plant and coal availability. The power demand recovery will help the company to gradually improve its financial performance,” said Edelweiss Securities in a report. However, the firm has a ‘REDUCE’ rating on the stock given the balance sheet and liquidation of claims pressures.

Adani Power is the largest private thermal power producer in India. It has a power generation capacity of 12,450 MW comprising thermal power plants in Gujarat, Maharashtra, Karnataka, Rajasthan, and Chhattisgarh and a 40 MW solar power project in Gujarat.