Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Mystery behind slump in India's Adani Group company shares

Stock MarketsJun 18, 2021 08:41AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: Indian billionaire Gautam Adani speaks during an interview with Reuters at his office in the western Indian city of Ahmedabad April 2, 2014. REUTERS/Amit Dave/File Photo

By Sudarshan Varadhan and Abhirup Roy

CHENNAI (Reuters) -Shares of companies controlled by Indian billionaire Gautam Adani recorded their biggest weekly losses ever. The six stocks cumulatively lost 1.91 trillion Indian rupees ($25.83 billion) of value over five days through Friday.

THE FUNDS

Indian newspaper Economic Times reported on Monday the accounts of three Mauritius-based funds, which are among the top foreign investors in Adani group companies, had been frozen by the National Securities Depository Ltd (NSDL).

The NSDL website showed accounts held by the three funds frozen as of May 31, among thousands of others, without citing a reason, according to a review by Reuters. The exact date of the freeze is unknown and the accounts remained frozen on Friday, according to the website.

DENIALS, CONTRADICTIONS

The Adani Group firms, in identical statements issued to stock exchanges, rejected media reports, including in the Economic Times, as "blatantly erroneous."

The companies, which are in the businesses of operating airports and ports, power generation and transmission, coal and gas trading, said the accounts in which the funds hold Adani shares were not frozen.

NSDL and India's securities regulator SEBI did not respond to requests for comment from Reuters.

But a senior NSDL official, who declined to be identified, told Reuters on Monday the funds have multiple accounts and that the Adani shares were held in other accounts that were not frozen, adding that freeze was "not new".

The shares of the Adani companies however have continued to fall.

THE FUNDS

The three foreign funds - Albula Investment Fund, Cresta Fund and APMS Investment Fund - are all registered at the same address, according to the Mauritius financial regulator.

The funds cumulatively control 2.7% of all shares in the Adani Group companies as on June 11, calculations based on an e-mail sent by Adani executive to NSDL and reviewed by Reuters showed.

Two other Mauritius-based funds that are also investors in Adani companies - LTS Investment Fund and Asia Investment Corp - are also registered at the same address.

Reuters was unable to find a website for all five funds, and calls to the phone numbers provided to Mauritius regulators went unanswered.

The five funds deployed 94.4%-97.9% of their total capital in Adani companies' shares, data by Indian stocks analysis firm Trendlyne showed.

Reuters could not independently verify Trendlyne data.

Four of the six Adani stocks have a public shareholding of about 25% - the minimum level mandated by regulators for companies listed on Indian exchanges.

Indian stock exchange data shows most shares of Adani Group companies are held by trusts controlled by Adani. Foreign portfolio investors are the next largest shareholders, while retail and domestic investors typically control about 5%.

THE IMPACT

After falling 0.4-8.5% on Monday, the day of the Economic Times report, Adani group stocks fell between 7.1%-22.6% over the week compared with last Friday's close, wiping out nearly 22% of the gains in the year preceding this week.

The decline saw the firms' cumulative market capitalisation decline by over a sixth.

Flagship Adani Enterprises rose 8.76% and Adani Ports rose 7.33% on Friday, but the four other Adani stocks each closed 5% lower.

Jimeet Modi, founder of Mumbai-based Samco Securities, said the jump in the two stocks was due to some investors buying the shares after the steep fall in prices this week, but added that the stocks were "still in a bear market".

"I don't think the market is convinced with the quality of the clarification from the Adani group," Modi told Reuters.

($1 = 73.9120 Indian rupees)

Mystery behind slump in India's Adani Group company shares
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Afzal Ali
Afzal Ali Jun 18, 2021 9:15AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Adani, a close ally of Indian PM Modi, is a big time fraud and known for his shady biz.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email