New Delhi: Riding on the so-called ‘Modi wave’, shares of various Gujarat-based companies have gained up to three times since the state Chief Minister Narendra Modi was declared BJP’s Prime Ministerial candidate seven months ago.
Since the September 13 announcement about Mr Modi, shares of various companies based and operating in Gujarat, including those of diversified conglomerate Adani group, have witnessed a strong bullish trend, as per an analysis of their stock price movements in the past seven months.
Market experts said the steep rally in the stock prices of companies with their roots in Gujarat is mainly driven by hopes of Mr Modi eventually becoming Prime Minister, while some of them warned that these shares may face a hard-landing if these expectations somehow do not fructify.
Adani Group’s flagship firm Adani Enterprises has seen its share price surge over three-fold from Rs 141.20 on September 13 to Rs 437.5 on April 11, 2014. Other Adani Group stocks, Adani Power has rallied 52.62 per cent, while Adani Ports gained 42.54 per cent as per the BSE data.
Among other companies whose stocks have caught the fancy of investors are Arvind Ltd that saw over two fold jump, Gujarat Pipavav Port rallied 91.13 per cent, Gujarat Mineral Development Corporation surged 53.46 per cent and Cadila went up 45.49 per cent.
Over the span of seven months, shares of Torrent Power climbed 45.4 per cent, while Gujarat State Petronet jumped 37.57 per cent and Gujarat Alkalies rose by 30.82 per cent.
“There is an expectation that if Mr Modi becomes the next Prime Minister, companies based in Gujarat will have an advantage. The Modi factor is riding these stocks high,” said Gajendra Nagpal, CEO and Founder, Augment Financial Services.
Japanese brokerage Nomura has said a Modi-led government will trigger up to a 10 per cent rally in the stock market. The BSE benchmark Sensex has gained 14.67 per cent to 22,628.96 during the period under review.
Experts said the recent run-up in the stock market is fuelled by growing hopes that the BJP, which is widely perceived as more business-friendly, will come to power at the Centre.
