Investors can cash in on Adani Ports’ rally

With a year-to-date gain of nearly 33 per cent, Adani Ports’ stock has convincingly entered the list of large-cap winners in 2017. Many factors have led to this rally, the most significant one being the closure of inter-corporate loans and advances. While announcing the September 2016 quarter’s results, the management promised its investors that loans extended to group companies, worth Rs 3,500 crore, would be fully repaid by the end of the financial year (end-March). The announcement on April 4 showed this had been done. Analysts view this development very positively, as a demonstration of the management’s commitment. Group stocks such as Adani Enterprise, Adani Power and Adani Transmission also recently touched their 52-week highs, as a ripple effect of closure on inter-corporate borrowings. Also interesting is that Adani Ports’ stock price movement mirrors the 30 per cent year-to-date increase in the Baltic Dry Index, the global measure of change in the cost to ship various raw …

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