Adani Group’s bonds and stock fell on Monday after a report from the Economic Times (ET) said that the accounts of three foreign funds holding shares in its group companies were frozen by the National Securities Depository Ltd (NSDL). The three foreign funds in question were Albula Investment Fund, Cresta Fund and APMS Investment Fund that held over INR 435bn ($5.9bn) in Adani group companies’ stocks. ET cited a senior official saying, “The freeze could be because of inadequate beneficial ownership documentation”. SEBI, the capital market regulator had updated KYC documentation for FPIs in 2019 regarding the prevention of money laundering. Along with this, FPIs were required to disclose common ownership and personal details of key employees of the fund like fund managers. This comes after SEBI launched an investigation last year into Adani Groups’ stocks for price manipulation after its groups’ stocks have risen between 200-1000% in the last one year with the investigation still ongoing.
“We regret to mention that these reports are blatantly erroneous and 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,” Adani Enterprises and its group companies said in a clarification statement. Separately, a source also said NSDL told Reuters that the accounts of the FPIs were not frozen.
Adani group companies’ stocks hit the lower circuit and most recovered the move by day end. Bonds also fell 1.5%-2.2% yesterday – Adani Ports’ 4.375% 2029s and 4% 2027s were down 2.2% and 1.6% to 104.8 and 104.7 respectively and Adani Electricity’s 3.949% 2030s were down ~2% to 101.2. Bonds have recovered slightly today.