Adani Power shares crash 80% in just one day! Is that true? – News Air Insight

Shares of Adani Power came under focus on Monday, September 22, slipping as much as 80% to a day’s low of Rs 147 per share on NSE, as the stock traded ex-split following the company’s decision to subdivide one share of face value Rs 10 into five shares of face value Rs 2 each.

The stock, which had closed at Rs 716 (over 13% higher) on Friday, opened lower due to the adjustment and was seen trading around Rs 147 in early deals, reflecting the 1:5 split. While the sharp fall in price may appear steep compared with the previous close, the decline is purely optical, as the stock has been adjusted to reflect the higher number of shares now available in the market.

Also read: Cheers to premiumisation! These 4 alcohol stocks can rally up to 18%. Do you own any?

The record date for the corporate action was Friday, September 19. Shareholders holding Adani Power shares in their demat accounts at the close of that session are eligible for the split. For example, an investor who owned 100 shares on Friday will now have 500 shares credited to their demat account, each with a face value of Rs 2. The overall value of holdings, however, remains unchanged.

A stock split does not change a company’s market capitalisation or the total value of investor holdings, but it increases the number of shares outstanding, thereby improving liquidity. Companies typically carry out such splits to make their shares more affordable to a broader range of investors, particularly retail participants.

Adani Power had announced the share sub-division along with its June quarter earnings in July. The company reported a consolidated net profit of Rs 8,759 crore for the quarter, up 83% from Rs 4,779 crore in the year-ago period, supported by higher power demand and improved realisations.On Friday, Morgan Stanley initiated coverage on Adani Power with an overweight rating and a price target of Rs 818 per share. The international brokerage described the company as India’s largest private coal-based independent power producer (IPP), with 18.15 GW of operational capacity.Read more: Gold price target of $6,600 is now reasonable, says Jefferies’ Chris Wood. Here’s why

Morgan Stanley expects Adani Power to nearly 2.5x its portfolio to 41.9 GW by FY32, which would lift its market share in coal-based capacity from 8% in FY25 to 15% by FY32. The company plans to spend about US$22 billion on under-construction capacity of 23.7 GW, with Morgan Stanley factoring in potential cost overruns that could push total capital expenditure to US$27 billion.

At around 9:20 am, shares of Adani Power were trading at Rs 168 each, up 14% from the day’s low of Rs 147 on NSE.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)