Sunday, Mar 26, 2023

Why Adani Group's Stocks Shed $7.3 Billion?

Why Adani Group's Stocks Shed $7.3 Billion?

Adani Group Shares: Three foreign funds – APMS Investment Fund, Albula Investment, and Cresta Fund – purchased shares worth Rs 43,500 crore in four companies of Adani Group.

Adani Group denied that accounts of three FPI holding shares in the group were not frozen by the NSDL

Shares of Adani Group companies traded on a somber note for the second straight day on Tuesday even after National Securities Depository Ltd (NSDL) clarified that the accounts of three foreign funds - holding nearly Rs 43,000 crore worth of Adani group shares - are 'active' and not frozen.

Earlier on Tuesday, Adani Group had also denied that accounts of three foreign portfolio investors (FPI) holding shares in the group were not frozen by the National Securities Depository Ltd (NSDL). 

Shares of Adani Green Energy, Adani Ports, and Adani Enterprises rose up to 5 per cent each in intra-day today but soon pared gains to trade flat-to-negative.

Adani Enterprises, the conglomerate's flagship company, as also Adani Ports and Special Economic Zone, Adani Green Energy Ltd, Adani Transmission Ltd, Adani Power, and Adani Total Gas Ltd in identical filings to the stock exchanges said the reports of NSDL freezing accounts of Albula Investment Fund, Cresta Fund and APMS Investment Fund holding shares in the group firms were "blatantly erroneous and is done to deliberately mislead the investing community."

"This is causing irreparable loss of economic value to the investors at large and reputation of the group," they said.

Given the seriousness of the issue and its consequential adverse impact on minority investors, "we requested Registrar and Transfer Agent, with respect to the status of the Demat Account(s) of the aforesaid funds and have their written confirmation vide its e-mail dated 14th June, 2021, clarifying that the Demat Account(s) in which the aforesaid funds hold the shares of the company are not frozen," the firms said.

NSDL in an email to Adani group said, "the status of demat accounts mentioned in your trail email are held in 'Active' status in NSDL system".

The NSDL website, however, showed the accounts of Albula Investment Fund, Cresta Fund and APMS Investment Fund -- which are registered at the same address in Port Louis -- as being frozen without citing a reason.

It listed Albula Investment Fund Ltd (PAN No. AAHCA3597Q), APMS Investment Fund Ltd (PAN No. AAECM5148A) and Cresta Fund Ltd (PAN No. AADCC2634A) as "account level freeze".

A source at the group, however, said the Registrar has in writing stated that the accounts that hold Adani group stocks have not been frozen. The accounts being shown has frozen on NSDL website are for different shareholdings.

The Demat Account which held Cresta Fund's 10.76 crore shares of the six listed Adani group firms and that of Albula Investment's 8.59 crore shares were 'Active'. APMS Investment Fund's account that had 15.52 crore shares of five firms (it did not have had shares of APSEZ) was also 'Active'.

The three funds feature among the top 12 investors and owned about 2.1 per cent to 8.91 per cent stakes in five Adani Group companies as of March 31, 2020, annual investor presentations show. The value of their holding in the five Adani group firms was valued at USD 7.78 billion before the stocks witnessed mayhem on Monday.

In a statement later, the ports-to-energy conglomerate said the FPIs (Foreign Portfolio Investors) in question have been investors in Adani Enterprises Ltd for more than a decade.

"Demergers (which led to creation of separate firms holding businesses such as power, renewable and city gas) have resulted in the ownership mirroring in the portfolio companies," it said.

"All our businesses were incubated by the Adani Enterprises Ltd. the flagship company, established in 1994, and during the last seven years Adani Ports, Adani Transmission, Adani Green Energy and Adani Gas Ltd were demerged and listed on Indian Exchanges," it added.

The port business is with Adani Ports & Special Economic Zones Ltd while renewable firm Adani Green Energy Ltd (AGEL) has contracted capacity of 25 GW and is ranked the largest solar power developer in the world. Adani Transmission Ltd operates the largest private transmission network in India of over 17,000 ckm and Adani Total Gas Ltd has license to retail city gas in 38 geographical areas.

"Adani Enterprises Limited, continues to nurture new businesses such as airports, roads, data centre, solar manufacturing and offers immense value to the investors when these entities get listed separately," the statement said.

The Adani Group portfolio continues to attract investors and strategic partners both at primary and secondary level.

"Adani portfolio continues its journey of exponential growth across all verticals thus ensuring immense value to its stakeholders. We urge all our stakeholders not to be perturbed by market speculations," it said.

With PTI inputs