Adani shares trim losses after group denies reports of foreign funds freeze

REUTERS: Shares of India’s Adani group companies trimmed losses yesterday after they said reports the National Securities Depository Ltd (NSDL) had frozen the accounts of three foreign funds that are among the top stakeholders in the firms were erroneous.

Adani Enterprises, the flagship company of the group controlled by billionaire Gautam Adani, had plunged as much as 25 percent, its steepest fall in nearly a decade. Nifty 50-listed Adani Ports and Special Economic Zone fell as much as 19 percent before paring losses.The NSDL said on its website it had frozen the accounts of Albula Investment Fund, Cresta Fund and APMS Investment Fund, without citing a reason. India’s securities regulator SEBI and NSDL did not respond to requests for comment.

The Adani Group companies issued identical statements to the country’s stock exchanges, saying reports about the NSDL freezing accounts of the funds were “blatantly erroneous”.

They said they had an e-mail from the “Registrar and Transfer Agent” dated June 14 saying “that the Demat Account in which the aforesaid funds hold the shares of the company were not frozen”.

NSDL handles securities in the Indian capital market, similar to holding funds in bank accounts, with transfer done through simple account transactions, according to its website. Reuters was unable to reach the funds for comment. It was not immediately clear if the funds had functioning websites.A report in India’s Economic Times yesterday said the freeze on the three accounts could be because of insufficient disclosure of information related to beneficial ownership.

The three funds feature among the top 12 investors and owned about 2.1 percent to 8.91 percent stakes in five Adani Group companies as of March 31, 2020, annual investor presentations show.

The value of their stakes in Adani Power Adani Enterprises Adani Green Adani Transmission  and Adani Total Gas Ltd spiked over tenfold since end-March 2020 to Rs.569.32 billion (US $ 7.78 billion) as of Friday, according to Reuters calculations.

This is in line with a broad rally in shares of Adani Group companies over the period that has made Chairman Adani the second richest Asian, behind Mukesh Ambani, who is Chairman of oil-to-telecom conglomerate Reliance Industries.

Shares of Adani Enterprises have risen more than tenfold in the past year to Friday, while Adani Transmission shares have gained more than eightfold and Adani Total Gas Ltd shares have jumped 1,114 percent.

Adani Ports Ltd has risen 148 percent, while Adani Green (has grown 267 percent and Adani Power has jumped nearly fourfold over the past year.