The shares of Adani Green Energy plunged 12.21% on Tuesday’s intraday trade, wiping off $10.6 billion in market cap. They reached a low of ₹1833.10 and a high of ₹2140.00 during the day. The shares changed 1,48,97,503 hands before they closed at ₹1888.95 apiece. The shares are currently trading at ₹1861.80 levels. In the past month, the company’s share price has fallen by 34.64%.
Adani green has provided multibagger returns of 552% in the past 2 years and 45% in the last one year
Power stocks were trading in the red with the S&P BSE Power index falling 93.81 points or 2.17%. Adani Green Energy Ltd, Adani Transmission Ltd, Adani Power Ltd. NHPC Limited and JSW Energy Ltd. are some of the constituents of the index that dragged it down. On the other hand, NTPC Limited, Torrent Power Limited and Power Grid Corporation of India moved it up.
Here’s why the shares of the company fell:
Sectoral effect
For the past few weeks, the market’s behaviour has been unpredictable. A few sectors have gained considerably, while a few sectors have plunged around 15% to 20%. Most of the companies in the green energy sector have their charts in red. Adani Green Energy, Borosil Renewables, KP Energy, Websol Energy Systems, and Zodiac Energy, all have exhibited downward trends in the past month.
Group Effect
Most of the shares of the Adani Group companies have tumbled after reaching highs in April, owing to a market selloff among other concerns. The share price of these companies has fallen by more than 8% in the last month.
The Mini Bubble
The Indian government announced to raise renewable energy capacity to 500 Gigawatt by 2030. India has a renewable energy capacity of around 100 GW as per December 2021 data. Big Players like Adani and Reliance decided to increase their capacity. Many investors flocked in to invest in these companies to benefit from the increase in business. As a result, the share price surged. The markets are volatile right now and the mini bubble seems to have burst.
Valuation Concerns
Adani Group stocks were some of the top gainers amid the pandemic and the Russia Ukraine crisis. Huge demand for these stocks drove their price upward. Many investors invested in the stocks of the company without being aware of the fundamentals. However, the markets took note of this and brought down the most overvalued stocks.
Disclaimer
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