According to a financial expert at New York University, the Adani enterprise share price is overpriced on several parameters despite falling more than 50% in the meltdown brought on by the damning report published by US short seller Hindenburg Research last month.
Adani enterprise share price
Aswath Damodaran of New York University stated in a blog post on February 4 that Adani Enterprises Ltd. generated a value of 945 rupees per share even before “factoring any of the Hindenburg charges of fraud and wrongdoing.” At 12:30 pm on Monday, the stock was trading in Mumbai for 1,561 rupees, or 40% higher than the value determined by Damodaran, whose work has been extensively disseminated in prestigious finance publications.
Given its fundamentals (cash flows, growth, and risk), I continue to believe the firm is valued too expensive, he continued. The collapse has reduced the market value of billionaire Gautam Adani’s empire, which includes enterprises in the energy and port industries, by nearly $118 billion.
The professor said that “irrational exuberance” had “minimal play” for firms in the infrastructure industry since the stock’s so-called price-to-earnings ratio increased from 15 times earnings in the five years leading up to 2021 to 214 times in the previous two years. According to Damodaran, the business’s interest costs are only marginally more than operating revenues.
The charges of the short seller have continuously been refuted by Adani Group. Email inquiries on Damodaran’s opinions received no response from a corporate official.
According to the blog post, even if the shares decline any further, the professor won’t be purchasing Adani Enterprises stock since family ownership typically raises the chances of secrecy and wealth transfers.
You are one political election away from losing your main competitive edge if the family group enterprises are formed around political ties, according to Damodaran.