Shares of some companies of Adani group fell off the cliff this morning on news of NSDL (National Securities Depository Limited) freezing accounts of overseas Mauritius-based funds.
The interesting fact about these funds is that an exceedingly high concentration of their portfolio is in Adani group stocks. Further, all these funds are registered in the same address in Port Louis. These funds hold about Rs 43,500 crore worth of shares.
The grounds for freezing the accounts is that the funds are in clear violation of the rules of funds investing in the Indian stock markets that they cannot have a single stock beyond a certain percentage of their total assets, but six out of the seven funds held more than 95% of their capital in Adani shares.
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A national daily collated the following data regarding the funds and the percentage of their networth due to Adani shares:
1. Vespera Fund 98.30%
2. LTS Investment Fund 97.47%
3. Cresta Fund 97.40%
4. Elara India Opportunities Fund 97%
5. Apms Investment 96.18%
6. Albula Investment 95.40%
7. Asia Investment Corporation 35.17%
The red flag for this investigation was also fast upmove in Adani group stocks with a large percentage of ownership by the overseas funds and very little public ownership.
As an initial measure, on account of being frozen, these funds cannot buy or sell any securities.
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At the time of writing, Adani Enterprises is down 11.39%, Adani Ports & SEZ is down 12.5%, Adani Power has hit lower circuit (i.e. no buyers) and is down 4.99%, Adani Green is down 4.98%, Adani Transmission too has hit lower circuit and is down 5%, and the same goes for Adani Total Gas which too has hit lower circuit and is down 5%.
With the reaction the markets have given to this news, Gautam Adani has lost a sizable portion of his wealth.