Earlier this month, when International Holding Company (IHC) agreed to invest in three Adani Group companies, it wasn’t the first international strategic investor to do so. Nor was the amount of money on the table an anomaly. 

The Abu Dhabi-based investment firm is investing a mammoth $2 billion $2 billion Forbes Adani Group Receives $2 Billion Investment From Abu Dhabi For Green Energy Push Read more  in clean energy producer Adani Green Energy, power transmission company Adani Transmission, and the Adani Group’s flagship entity, Adani Enterprises. Before IHC, French energy giant TotalEnergies SE invested in Adani Gas—which later became Adani Total Gas—and Adani Green in 2019 2019 The Hindu BusinessLine Total buys 37.4 per cent stake in Adani Gas for Rs 6,155 crore Read more  and 2021 2021 The Economic Times French energy group Total buys 20% stake in Adani Green Read more , respectively, pumping $3.1 billion into the publicly listed companies.  

It’s not just international investors. State-owned behemoth Life Insurance Corporation, which is heading towards an initial public offering (IPO), also upped its stakes in Adani Total Gas, Adani Transmission, and Adani Enterprises over the past few quarters. 

Much of these additional stake purchases would have been very costly—five of the seven listed Adani Group companies have seen a gravity-defying rally over the past year.  

In April 2021, not one Adani Group company was among India’s 20 most valuable listed companies, according to capital markets data provider Prime Database. Now, there are three—Adani Green Energy, Adani Transmission, and Adani Total Gas. With a market capitalisation of over Rs 4,54,000 crore (~$59 billion), Adani Green is worth almost as much as State Bank of India, the country’s largest bank, and more than Bharti Airtel, India’s second-biggest telco.

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Valuations, already unreasonable to begin with, are now just completely out of whack. For instance, Adani Green is trading at a trailing price-to-earnings trailing price-to-earnings trailing price-to-earnings Trailing price-to-earnings (P/E) is a valuation metric calculated by dividing the current stock price by the earnings per share (EPS) of the past 12 months. (P/E) multiple of 1,109X, compared to peer Tata Power’s 47X, according to data from market information provider Screener.in.