In a week that has proven pivotal for India’s energy markets and investor sentiment, Adani Power Ltd. (NSE: ADANIPOWER) has seen its share price rise sharply following two major developments. Global brokerage Morgan Stanley initiated coverage with an “Overweight” rating, projecting nearly 30% upside, while India’s markets regulator SEBI dismissed several allegations of manipulation and related-party violations tied to the Hindenburg saga. Together with a long-term power supply agreement in Bihar, these events have bolstered confidence in Adani Power, turning the stock into one of the top movers in the Indian market.
Morgan Stanley’s Bullish Call on Adani Power
On Thursday, shares of Adani Power surged as much as 9% after Morgan Stanley began coverage of the company. The brokerage house gave the stock an “Overweight” rating and set a target price of ₹818 per share, reflecting a potential upside of nearly 30% from its recent levels.
According to the global investment firm, Adani Power is well-positioned to capitalize on India’s growing electricity demand. Its expanding generation capacity, strong presence in coal-based thermal plants, and robust long-term Power Purchase Agreements (PPAs) provide revenue visibility. Morgan Stanley noted that under the government’s SHAKTI policy framework, Adani Power has secured stable coal linkages, ensuring reliability in operations.
The upbeat coverage signals a shift in international investor perception. For months, Adani Group stocks were weighed down by the fallout of the Hindenburg Research report, which accused the conglomerate of stock manipulation and questionable corporate governance practices. Morgan Stanley’s move indicates renewed faith in the fundamentals of Adani Power, underpinned by India’s urgent need for reliable power supply.
SEBI’s Clean Chit Clears Overhang of Hindenburg Allegations
In another confidence-boosting development, the Securities and Exchange Board of India (SEBI) dismissed several allegations made by Hindenburg Research against the Adani Group. After months of detailed investigations, SEBI stated it found insufficient evidence to support claims of widespread stock manipulation or undisclosed related-party dealings.
This ruling has been described as a “clean chit” for Adani Power and its parent conglomerate, signaling the end of a regulatory cloud that has hovered since early 2023. Following SEBI’s announcement, Adani Power shares gained more than 7% in a single trading session, with analysts noting that the stock may now trade more freely without the overhang of legal uncertainty.
Market observers argue that SEBI’s decision is not only a relief for the Adani Group but also for India’s broader corporate sector. The case had raised questions internationally about regulatory oversight and the transparency of Indian companies. By clearing Adani of key charges, SEBI has reaffirmed investor confidence in the robustness of India’s markets, even as some critics continue to argue for further scrutiny.
New Bihar Power Deal Strengthens Long-Term Prospects
Adding to the momentum, Adani Power recently signed a 25-year agreement with the Bihar government to supply 2,400 megawatts of electricity. This contract, among the largest of its kind, highlights the company’s role as a major supplier of reliable power to Indian states.
The deal not only assures Adani Power of steady revenue for decades but also underlines the increasing demand for stable electricity supply across India’s growing industrial and residential hubs. Analysts note that this contract strengthens Adani Power’s portfolio of long-term agreements, offering investors clarity on future cash flows.
The Bihar agreement also aligns with India’s broader policy push to expand access to electricity, reduce shortages, and stabilize grids in high-growth regions. For Adani Power, such contracts position the company as a cornerstone of India’s power infrastructure at a time when the country is navigating both rapid growth and the global transition to cleaner energy.
Investor Sentiment Shifts Dramatically
The combined effect of Morgan Stanley’s bullish outlook, SEBI’s clean chit, and the Bihar power deal has dramatically shifted investor sentiment. For much of the past two years, Adani Power shares faced volatility driven by external controversies rather than fundamentals. With these clouds lifting, analysts expect renewed institutional participation and stronger retail interest.
According to stock market data, trading volumes in Adani Power have surged over the past week, with foreign institutional investors (FIIs) showing signs of increased activity. Brokerage houses in India, too, are revising their ratings, with many moving from “neutral” to “buy” stances.
The stock’s performance also reflects broader optimism in the Adani Group. Other group companies, including Adani Enterprises and Adani Green Energy, also saw their share prices rise in the wake of SEBI’s ruling.
Challenges That Remain
Despite the positive momentum, Adani Power continues to face challenges. The company remains heavily reliant on coal, at a time when India and the global economy are under pressure to transition to renewable energy. While Adani Group has made large commitments to green energy through Adani Green, critics argue that Adani Power’s business model will eventually face headwinds as the world moves toward cleaner alternatives.
Moreover, while SEBI’s dismissal of allegations is a major relief, the episode has highlighted vulnerabilities in corporate governance perceptions. International investors may continue to scrutinize the company’s financial disclosures and related-party transactions more carefully than before.
Additionally, the volatility of coal prices and global supply chain disruptions remain potential risks to operational stability. Adani Power must balance its coal-based operations with future investments in diversified, sustainable energy projects to remain resilient.
Broader Implications for India’s Market
Adani Power’s resurgence also carries broader implications for India’s financial markets. The stock’s rally following SEBI’s ruling and new business deals demonstrates how regulatory clarity and long-term contracts can drive investor confidence, even after periods of intense scrutiny.
For India, where electricity demand is forecast to nearly double by 2040, companies like Adani Power play a crucial role in bridging supply gaps. Their performance not only affects shareholders but also the trajectory of India’s industrial growth, rural electrification, and global climate commitments.
The sharp moves in Adani Power’s share price also highlight the power of global brokerages in shaping sentiment. Morgan Stanley’s rating triggered one of the biggest single-day rallies in months, reflecting how international validation can unlock value in Indian stocks.
Adani Power’s recent share price surge is more than just a market story. It is a reflection of how regulatory clarity, strong institutional endorsements, and long-term business deals can realign investor confidence in a company once shrouded in controversy.
The Overweight rating from Morgan Stanley, SEBI’s clean chit, and the landmark Bihar contract have together marked a turning point for Adani Power. While challenges remain in the form of energy transition and global scrutiny, the company appears firmly positioned to ride India’s rising electricity demand.
For investors, Adani Power now represents both an opportunity and a test case of how quickly fortunes can change when fundamentals align with favorable external signals.
As the dust settles, the company’s trajectory may serve as a bellwether for India’s power sector and a reminder that in the world of stocks, sentiment can shift as dramatically as supply and demand curves in the energy market itself.