See-saw for Adani Group stock, denies freeze on a/c of investors

SHARES OF Adani Group companies plunged up to 25 per cent intra-day Monday following news reports that accounts of three foreign investor funds holding sizeable stake in the group’s companies had been frozen by National Securities Depository Ltd (NSDL).

The shares recovered partially after the group companies denied the news reports and informed stock exchanges that the demat accounts in which these foreign funds hold their shares were not frozen.

An email sent by NSDL to the Adani Group following a query on the status of these funds, and seen by The Indian Express, noted that the status of the demat accounts of the three funds holding shares in Adani Group companies is “active” in the NSDL system.

The reason why the NSDL website continues to reflect the name of these three foreign funds — Albula Investment Fund, Cresta Fund and APMS Investment Fund — in the list of frozen accounts as on May 31, 2021, was because these accounts were different from those which held shares of Adani Group companies, a source in NSDL, who did not wish to be identified, said.

The NSDL source said it was possible the freeze could either be on separate FPI accounts held by the three funds or on the depository receipt (DR) accounts held by them. The DR accounts are for the purpose of holding equity shares issued upon cancellation of Depository Receipts (GDR/ADR) held by them.

In June 2016, capital market regulator SEBI had passed an order directing custodians to inform depositories to freeze beneficial accounts that received underlying shares on conversion cancellation of GDR issues by 51 companies. This list does not include any Adani Group company. Another source in Sebi, who also did not wish to be named, said the frozen account reflected on the NSDL website was probably linked to that order.

The shares of Adani Group, which witnessed big gains over the last few months, hit the lower circuit in the opening session on Monday. Minutes before the market closed for trading, the statement by the Adani Group to stock exchanges, led to some recovery. In the statement, the group said the reports are “blatantly erroneous”.

“Given the seriousness of the article and its consequential adverse impact on minority investors, we requested Registrar and Transfer Agent, with respect to the status of the demat account of the funds (Albula Investment Fund, Cresta Fund and APMS Investment Fund) and have their written confirmation vide its e-mail dated June 14, 2021, clarifying that the demat account in which the funds hold the shares of the company are not frozen,” companies in the Adani Group told the exchanges in separate filings.

“It 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,” it said.

Adani Ports which plunged 18.75 per cent to 681.50 in the opening session recovered to Rs 768.70 – still a loss of 8.36 per cent — after the company’s clarification. Adani Enterprises plunged 25 per cent but later recovered smartly to close at Rs 1,501.25 with a loss of only 6.26 per cent. Adani Green Energy declined 4.13 per cent to Rs 1,175.95 on the BSE, Adani Power fell 5 per cent to Rs 140.90, Adani Transmission by 5 per cent to Rs 1,517.25 and Adani Total Gas also by 5 per cent to Rs 1,544.55.

The market capitalisation of Adani Group shares had touched Rs 9.5 lakh crore last Friday. In the last one year, Adani Port shares surged by 145 per cent, Adani Transmission shot up by 697 per cent, Adani Green Energy 280 per cent, Adani Power by 310 per cent and Adani Enterprises 906 per cent. Adani Total Gas shares moved up from Rs 125 to Rs 1,544.55 in the last 12 months.

As the promoter holds a sizable stake in Adani companies, the promoter wealth has skyrocketed during the past year. The promoter holds nearly 75 per cent in Adani Transmission, Adani Power and Adani Enterprises.