The Employees’ Provident Fund Organisation (EPFO), India's largest retirement fund, continues to hold investments in multiple Adani Group securities even after a short-seller report caused a market rout in all the listed companies of the Gautam Adani-led conglomerate. The Hindenburg report that came out in January had caused a drastic drop in the market capitalisations of Adani backed companies, and raised concerns over public entities’ exposure to the the beleaguered business group.
The EPFO, which houses the retirement savings of over 27 crore Indians, continues to have exposure to Adani Group companies via its investments in exchange traded funds (ETFs) that track companies included in the NSE Nifty 50 and the BSE Sensex indices, The Hindu reported on Monday. As per the report, it is not yet clear whether EPFO fund managers stopped making fresh investments in those stocks since the Hindenburg report came out on the January 24.
The US-based short-seller had alleged that Adani Group companies were involved in fraud and stock price manipulation. Although the conglomerate denied all allegations, it could not prevent a selling spree of Adani stocks in late January and much of February.
Earlier, the Life Insurance Corporation (LIC) had come under fire for its exposure to Adani stocks, jeopardising the savings of thousands who had parked their funds with the state-backed insurer. In the form of its Nifty 50 ETF investments, it is now certain that EPFO, which is managed by a trust under the union labour ministry, has exposure to at least two Adani Group companies: Adani Enterprises and Adani Ports and SEZ (APSEZ).
While APSEZ has been part of the Nifty 50 since September 2015, Adani Group's flagship company Adani Enterprises was included in the benchmark index in September 2022. Now, as per the National Stock Exchange's bi-annual review, both Adani Enterprises and APSEZ will continue in the Nifty 50 index for at least six more months starting March 2023.
As per the Hindu report, EPFO had invested Rs 1.57 lakh crore in ETFs as of March 2022 and it made a further investment of Rs 8,000 crore in FY 2022-23.
Interestingly, the report on EPFO's exposure to Adani stocks comes on the first day of the two-day meeting of the Central Board of Trustees (CBT) which manages the EPFO. The CBT is chaired by the Union Minister for Labour and Employment Bhupender Yadav and the board is responsible for discussions around pension, interest rates for FY23 and annual financial estimates of the EPFO. In the light of this new report, it will be interesting to see if the EPFO issues any clarifications on its investments in Adani companies or if the pension fund makes any cuts in its ETF investments.
