Adani Group Loses Over Rs 1 Lakh Crore After NSDL Freezes 3 FPI Accounts; Company Terms Reports As 'Market Speculations'

Adani Group's listed firms M-cap fell by over Rs 1 lakh crore as NSDL reportedly freezes 3FPIs accounts with exposure of Rs 43,500 crore in Adani stocks

Mumbai: In what could put a break to Gautam Adani from becoming Asia's richest and bull run of Adani Group shares, the National Securities Depository Ltd (NSDL) has frozen the accounts of three foreign funds that together own shares worth Rs 43,500 crore in four Adani Group companies.

Reacting to the news, shares of six Adani Group listed firms eroded over Rs 1 lakh crore of market capitalization as shares of Adani Group's flagship firm Adani Enterprises and Adani Port, and SEZ fell by 20% on Monday morning while Adani Power, Adani Transmission, Adani Green Energy, and Adani Total Gas shares fell by 5%.

The accounts of Albula Investment Fund, Cresta Fund, and APMS Investment Fund were frozen on or before May 31, as per the depository's website, meaning that the funds would not sell any of the existing or buy new securities.

The fall in market capitalization of Adani Group listed stocks has made Gautam Adani poorer by $6.3 billion as his fortune plunged to $68.6 billion as of June 14, widening the gap with Asia's richest Mukesh Ambani with a fortune of $85.8 billion, according to Forbes Real-Time Billionaires list.

Based out of Mauritius, all the three funds are registered with the Securities and Exchange Board of India (SEBI) as foreign portfolio investors (FPIs). They together hold 6.82% in Adani Enterprises, 8.03% in Adani Transmission, 5.92% in Adani Total Gas, and 3.58% in Adani Green. They are registered at the same address in Port Louis and don't have websites. Adani Group is yet to issue a statement.

A sharp rally in the shares of some Adani Group companies had added more than $40 billion to Gautam Adani's wealth this year, making him Asia's second-richest person.

The rapid rise in these stocks, which are held mainly by foreign funds and have a small public float, had also prompted some analysts to raise concerns about the risks involved.

When asked for clarification, Adani Group, in a statement, said, "This is to clarify that the FPIs in question have been investors in Adani Enterprises Ltd for more than a decade. Demergers have resulted in ownership mirroring in the portfolio companies. 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."

During COVID 19 pandemic, Adani Group's EBITDA went up 22% to Rs 32,300 crore in FY2021 from Rs 26,400 crore in FY2020.

Talking about the outlook of the Adani Group, the statement said, "Based on the current announcements and disclosures, similar growth is expected in March 2022. While Adani Ports has guided for an 11 to 12% cargo volume growth, AGEL operational capacity will increase by over 5 times from under 2 GW in FY20 to nearly 10 GW in FY22. Similarly, Adani Transmission Ltd., will add 2500 ckm and cross 20,000 ckm of transmission assets. This will ensure continued outperformance by Adani listed entities in FY22 and beyond."

After the clarification from the Adani Group, Adani Enterprises and Adani Port and SEZ reversed some of the losses, while Adani Green shares started trading in green.