Monday, July 26, 2021
Home Business Mystery behind slump in Adani Group company shares - Times of India

Mystery behind slump in Adani Group company shares – Times of India


CHENNAI: Shares of companies controlled by billionaire Gautam Adani recorded their biggest weekly losses ever. The six stocks cumulatively lost Rs 1.91 lakh crore ($25.83 billion) of value over five days through Friday.
The funds
According to a report by the Economic Times 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.
Dentals, contradictions
The Adani Group firms, in identical statements issued to stock exchanges, rejected the reports, stating them to be “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 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.
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.





Source link

RELATED ARTICLES

Nitin Gadkari says GST was ‘very essential’, sees ‘room for improvement’ – Times of India

NEW DELHI: With the Goods and Services Tax (GST) regime completing four years, Union minister Nitin Gadkari on Thursday said this tax reform...

Sebi confirms securities market ban on various entities in front-running case – Times of India

NEW DELHI: Regulator Sebi has passed a confirmatory order barring 19 entities, including individuals, from the securities market till further orders in a...

Enhanced GST revenue collections should now be ‘new normal’: Nirmala Sitharaman – Times of India

NEW DELHI: Commending taxmen for the enforcement measures in dealing with GST fraud, finance minister Nirmala Sitharaman on Thursday said the enhanced revenue...

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Most Popular

Amazing and Thoughtful Birthday Gifts for Parents

Our parents are our strengths and play the most important roles in our lives. They help us mentally, emotionally, and financially to...

Guides To Fix Error [pii_email_b47d29538f12c20da426]

At any point have you faced pii_email_b47d29538f12c20da426 error ? If not, continue perusing. With Microsoft Outlook, clients worldwide get the advantage to...

Error code [pii_email_cbd448bbd34c985e423c]

Outlook is fast, easy to use, and it's many other advantages. Sometimes Microsoft Outlook won't work thanks to some error codes like...

Occurrence of error [pii_email_5b2bf020001f0bc2e4f3]

These are some ways to repair this error. I hope now you'll remove this error code . If you continue to find...

Recent Comments