Adani Green Energy enters top 10 market cap club

It is said that that top-10 most valuable companies list is generally a very dynamic list and keeps changing. While the large companies like Reliance Industries, TCS, HDFC Bank, Infosys and Hindustan Unilever have been in that league for a long time, the others do often keep hopping in and out.

Recently, we have seen companies like SBI, Kotak Bank, Bharti Airtel, Wipro and HCL Tech briefly move in and out of this top-10 value list.

Market cap is a measure of value as assigned by the stock markets and is seen as an objective and agnostic measure of value.

It is also more meaningful for companies that can never really compete on top line. For instance, the biggest companies in terms of revenues like ONGC and IOCL hardly appear in this top-10 value list. The latest entrant into the top-10 value list is Adani Green Energy Ltd (AGEL), which went past Bharti to the tenth spot.

The stock of AGEL has had a virtually fairy tale run, appreciating more than 20 times in the last 2-3 years and was almost unperturbed by the pandemic.

One of the largest alternate energy companies in the world, Adani Green Energy entered the list of top-10 most valuable companies in India, after it rallied by 25% on Friday and Monday and has since rallied by another 4% on Tuesday. The stock is the biggest value stock in the Adani group.
 

In terms of stock price, Adani trades at Rs.2,806 as of mid-day on 12th April. In the last one year, the stock has touched a low of Rs.860 and touched a high of Rs.2,951 on Tuesday. The stock has an overall market cap of Rs.4.39 trillion as of Tuesday mid-day with a free float market cap of close to Rs.1 trillion.

It may not be too useful looking at the P/E of the stock but it underlines the much bigger trend of how value is shifting to futuristic businesses.

The latest trigger for the stock came after the International Holding Company (IHC) based out of the United Arab Emirates agreed to invest Rs.3,850 crore in Adani Green Energy by way of a preferential issue.

Adani Green Energy will allot a total of 20.02 million equity shares on a preferential basis to IHC at Rs.1,923.25 per share, which adds up to Rs.3,850 crore. This is an indication of the global fund interest in the business model of AGEL.

AGEL has among the world’s largest renewables portfolio of 20.4 gigawatts (GW) which is currently locked in across operational, under-construction, awarded and acquired assets. AGEL develops, builds, owns, operates and maintains utility-scale grid-connected solar and wind farm projects.

Its major customers in India include Solar Energy Corporation of India (SECI), NTPC and various state power distribution companies or DISCOMs. AGEL targets 45 GW of renewable capacity by 2030 or 10% of India’s overall renewable energy target.

Here is a quick look at the most valuable companies in India and their market cap as updated at 12.35 pm on 12th April 2022.