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Is Gautam Adani , a bubble ?

Let me tell you all the details about Gautam adani.

Anubhav4
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Is Gautam Adani , a bubble ?

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  1. In the last 3 year, adani Group has seen a 500- 500% Jump, But curren,tly Adani Group’s stocks are down by 5% and are expected to see even more fall according to the Finch rating‘s credit Sight Report which mentioned that Adani Group is “DeeplyOverleveraged. We can also say this Adani Group is unsustainably high against its equity. Total Debt on Adani Group is 2.2 lakh crores as of Mar 31, 2022. It is a result of Adani's aggressive expansion which is majorly depended on debt and has put enormous pressure on the credit metrics and flow of the company. Adani Group is also venturing into new and unrelated businesses which are capital incentives and may not generate profits initially which can spiral the company into a debt trap. Adani Group‘s Expansion The Adani Group Journey started with the Adani Export in the 1980s. Adani Group diversified its business from Ports to Airports defence, mining, cement, and media. And recently Adani also acquired Holcim’s India Unit consisting of ACC and Ambuja for 10.5 Billion and they also acquired a 29.28% stake in NDTV. Learn How to analyse stock with Top stock market course Massive Rise of Adani Last Year Gautam Adani added 49 Billion Dollar to his net worth making him the world Adani Group is Overleveraged Although Adani Group is rapidly growing and the expansion of Adani Group is majorly Fueled by the debt. The total estimated debt of Adani Group is 21 Billion dollars and a gross Debt of Rs. 2,309 Billion as of FY22. If you go by a report from Business Standard, the Revenue of Adani Group is 4.5 Billion Dollars excluding Adani Wilmar, but the combined profit of Adani Group is 1.14 Billion dollars. Adani Group Total Debt 2022 Total Debt (in crores) Company

  2. Adani Enterprises 41,024 Adani Power 48,796 Adani Wilmar 2,568 Adani Green 52,188 Adani Ports & SEZ 45,453 Adani Transmission 29,815 Adani Total Gas 995 Adani Share Price Bubble The current share price of Adani Group is 519 which is very much higher. The high p/e Ratio indicates that a stock price is overvalued and may fall in the future. Adani Group Companies P/E ratio Company P/E Ratio Adani Green Energy 765 Adani Transmission 436 Adani Enterprises 357 Adani Total Gas 751 Adani Wilmar 111 Adani Power 16 Adani Ports 36

  3. The Adani Group has been expanding most of its operations through debt, which has strained its balance sheet. Having too much debt is not good for any company. As most of the expansion of the Adani Group is fueled by debt it has put too much pressure on the balance sheet as too much debt is not good for any company. Company Current Price Jan 2020 Returns Adani Enterprises Rs.2,927 Rs.208 14x Adani Green Rs.2,347 Rs.197 12x Adani Ports Rs.806 Rs.383 2x Adani Power Rs.411 Rs.63 6x Adani Wilmar Rs.688 Rs.381 2x Adani Total Gas Rs.3,239 Rs.360 9x Adani Transmission Rs.3,318 Rs.347 10x Adani group have given mutifold returns in last 2 year especially Adani Enterprises and Adani Green. It means that investors are heavily investing in these stocks despite them being highly over-leveraged. Adani Group is consider too big to fail because of its shinning industry and its strong ties with the government and bank Learn stock market trading and investing with stock market basic course Finch Report mentions that in worst cases Adani Group could fall and even declare default. Because of high debt-to-equity ratio of the group and such high valuation of the group it could be risky for the invest int he Adani Stocks.

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