EPFO Will Continue To Invest In Adani Funds For At Least 6 More Months Despite Recent Stock Rout: Report

The EPFO will continue to invest in the two Adani Group stocks unless the trust decides against it during the meeting

The Employees’ Provident Fund Organisation (EPFO), which manages old-age savings of 27.73 crore Indians, continues to invest in Adani Enterprises and Adani Ports even after the port-to-energy conglomerate’s stocks were routed following a report by short-seller Hindenburg Research.

A report by The Hindu on March 27 revealed that the EPFO plans to invest till at least September this year. However, its trustees are expected to meet this week to rethink their investment approach, the publication reported. The EPFO will continue to invest in the two Adani stocks unless the trust decides against it during the meeting.

According to report, the EPFO subscribers are the captive investors because the two stocks are part of the Sensex and the Nifty that are tracked by EPFO-managed funds.

The Hindu report said the EPFO invests 15 per cent of its corpus in exchange-traded funds. As of March 2022, it had invested Rs 1.57 lakh crore in ETFs. It put in another Rs 8,000 crore in FY23, The Hindu reported.

The US-based Hindenburg Research in late January accused Adani Group of widespread manipulations and malpractices to inflate its stock prices. The Gautam Adani-led group, however, denied all the allegations but that did little to prevent the hammering of its stocks.

The report by The Hindu comes on the day the Central Board of Trustees, which manages EPFO, begins its two-day meeting to discuss higher salary-linked pension, FY23 interest rates, and annual financial estimates. The proceedings of India’s largest retirement fund will be closely tracked as they affect millions of people.

After the hammering of Adani Group stocks, experts called for greater transparency and accountability in the investment decisions made by EPFO. Some have suggested diversifying the investment portfolio to yield better returns in the long term.

The 233rd meeting of the CBT, chaired by Union labour and employment minister Bhupender Yadav, was scheduled for March 25-26 but was later pushed back.

Meanwhile, following criticism for investing in Adani Group companies, insurance behemoth Life Insurance Corporation of India (LIC) is planning to cap its debt and equity exposure to companies, reported news agency Reuters. State-run LIC faced criticism from economic experts and Opposition for having over $4 billion in exposure to Adani Group companies.