Adani Group Shares Rally Up to 13% as India-US Trade Deal Boosts Market Sentiment

Shares of Adani Group companies witnessed a massive surge on Tuesday, with some entities gaining as much as 13 percent in early trade. This rally followed the landmark announcement of a trade agreement between India and the United States, which triggered a broad-based buying spree across the Indian equity markets. Adani Enterprises and Adani Green Energy led the gains as investors reacted positively to the reduction in reciprocal tariffs and the removal of punitive duties related to oil imports.

The flagship company of the conglomerate, Adani Enterprises, jumped as much as 12 percent, marking its steepest intraday gain since November 2024. The stock opened with a significant gap-up and continued to climb throughout the morning session. This performance was mirrored across the group's portfolio, with Adani Ports and Special Economic Zone rising 8.33 percent, while Adani Green Energy emerged as the top gainer with a nearly 13 percent spike.

Details of the India-US Trade Agreement

The primary catalyst for the market-wide rally was the trade deal reached between Prime Minister Narendra Modi and US President Donald Trump. Under the new terms, the United States has agreed to lower its 25 percent tariff on Indian goods to 18 percent. This decision comes after India agreed to stop purchasing Russian oil, leading to the removal of an extra 25 percent duty previously imposed on such transactions.

Prime Minister Modi expressed his satisfaction with the development, noting that the reduction in tariffs would significantly benefit "Made in India" products. The agreement effectively ends a period of trade tension that began five months ago when Washington imposed 50 percent tariffs on several Indian exports, including punitive duties linked to India's energy procurement from Russia. Analysts suggest this deal makes Indian exports more competitive globally compared to other Asian peers.

Performance of Adani Group Entities

The rally was not limited to the flagship firm. Adani Energy Solutions saw a 10 percent jump, while Adani Power advanced 7.8 percent. Even the group's cement and media interests participated in the uptick, with Ambuja Cements rising nearly 6 percent and NDTV gaining over 6 percent. The collective market capitalization of the group saw a significant recovery following a period of volatility in the previous month.

Strategic Fundraising and International Ratings

Beyond the trade deal, specific corporate developments provided additional tailwinds for the group. Reports emerged that three Adani Group companies are planning to raise approximately $1 billion from Japanese markets. Adani Ports clarified in a regulatory filing that such fundraising is part of its routine capital management plan to meet future growth requirements.

Furthermore, the Japan Credit Rating Agency (JCR) initiated ratings for three major portfolio companies. Adani Ports & SEZ was assigned an A- rating with a stable outlook, a notable achievement as it represents a rare instance of an Indian corporate rating exceeding the sovereign threshold by an international agency. Adani Green Energy and Adani Energy Solutions were both assigned BBB+ ratings, which are at par with India's sovereign rating.

Broader Market Context and Brokerage Views

The Adani rally occurred amidst a historic surge in the benchmark indices. The Nifty 50 rose as much as 4.99 percent to cross the 26,300 mark, while the Sensex advanced over 4,200 points to hit an intraday high of 85,871. This represented the steepest intraday gain for the indices since early 2021. Global brokerage firm Jefferies identified Adani Group companies as key beneficiaries of the trade deal due to their significant exposure to the US market across various sectors.

Domestic brokerages like Antique Stock Broking also highlighted Adani Power and Adani Ports as potential winners. The deal is expected to boost labor-intensive sectors and improve the outlook for the Indian Rupee, which could further encourage foreign portfolio investment (FPI) inflows that had been sluggish in previous months.

Legal Developments and Procedural Clarity

Investors also appeared to find some relief in recent legal updates regarding the US Securities and Exchange Commission (SEC) case. Gautam Adani and Sagar Adani have reportedly agreed to receive legal notices from the SEC via their lawyers, a procedural step that removes the need for a judicial ruling on the mode of service. The group has consistently denied allegations of fraud and bribery, maintaining that no such claims have been made against the companies themselves.

This procedural clarity, combined with the positive macroeconomic news, helped the stocks rebound from the pressure they faced last month. Market experts noted that while the trade deal is a significant positive, the group stocks remain suited for investors with a higher risk appetite, given the ongoing legal proceedings in international jurisdictions.

Market Impact and Future Outlook

The immediate impact of the trade deal has been a reversal of the recent bearish trend in Indian equities. With US tariffs reduced to 18 percent, sectors such as textiles, engineering goods, and chemicals are expected to see improved margins. For the Adani Group, the focus now shifts to their quarterly financial results. Both Adani Enterprises and Adani Ports are scheduled to announce their December quarter earnings today, which will provide further fundamental data for investors to assess.

Conclusion

The sharp recovery in Adani Group shares underscores the sensitivity of the conglomerate to both global trade policies and international credit perceptions. While the India-US trade deal has provided a massive sentiment boost, the initiation of stable ratings from Japan's leading agency suggests a strengthening of the group's global financial standing. As the market stabilizes after this record-breaking rally, investors will be closely watching the upcoming earnings reports and any further developments regarding the group's international fundraising efforts.