Adani Power shares witnessed high volatility on September 22 following the completion of a stock split. The company had recently approved the split of its equity shares to improve liquidity and make them more accessible to retail investors. Although the adjustment made it appear that the stock had crashed nearly 80 percent, in reality, the decline was only a reflection of the corporate action.
Stock Split Impact and Price Movement
Adani Power had announced that the stock split was aimed at enhancing the liquidity of its equity shares by encouraging greater participation from retail investors. The corporate action increased the number of shares in circulation, thereby lowering the price per share without affecting the company’s overall market capitalization.
Following the split, Adani Power’s stock adjusted accordingly, which created the appearance of a sharp fall of about 80 percent. However, the adjustment had no negative impact on the company’s fundamentals. Instead, the shares surged more than 18 percent during the trading session, touching a 52-week high of ₹168.80 per share.
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Brokerage View and Market Sentiment
Adding to the positive momentum, global brokerage Morgan Stanley initiated coverage on Adani Power with an ‘overweight’ rating. The firm described Adani Power as a “good illustration of turnaround in India’s corporate history.” It also named the stock as its top pick in the sector.
Morgan Stanley highlighted that Adani Power is expected to deliver strong earnings growth, supported by timely completion of projects and the likelihood of securing more power purchase agreements (PPAs) in the medium term.
Regulatory Clearance Boost
The renewed investor confidence also comes after the Securities and Exchange Board of India (SEBI) cleared Adani Group and its chairman Gautam Adani of the stock manipulation allegations made by US-based short-seller Hindenburg Research. The regulatory clean chit has helped lift overall sentiment around Adani Group companies, including Adani Power.
Why the 80% Plunge is Misleading
While the stock appeared to fall nearly 80 percent post-split, investors were reminded that such price adjustments are common after a stock split. The action does not affect the company’s market value or shareholder wealth but instead increases the affordability and liquidity of the shares.
For investors, the focus remains on the long-term earnings potential, project execution, and regulatory clarity rather than short-term adjustments that may look misleading on stock charts.
