The Indian billionaire Gautam Adani’s dream of topping the global wealth rankings is dashing. Earlier media reports questioned some offshore investors, triggering a plunge in the six listed stocks of his group.
According to the Bloomberg Billionaires Index based on Wednesday’s closing price, the 58-year-old tycoon lost more money this week than anyone in the world, and his personal wealth fell by about 9 billion U.S. dollars to 67.6 billion U.S. dollars. Just a few days ago, he was closing the gap with Mukesh Ambani as the richest man in Asia. Adani Group shares continued to fall on Thursday.
On Monday, the “Economic Times” reported that the stocks began to take a big turn after the Indian National Stock Trustee froze the accounts of three Mauritius funds due to insufficient information about the owners. The majority of shares (approximately US$6 billion) in Albula Investment Fund, Cresta Fund and APMS Investment Fund are shares of Adani.
Although the Adani Group called the report “blatantly wrong” and stated that “it was done to deliberately mislead the investment community,” investors worried about transparency scrambled to exit.
According to Bloomberg, the Mauritius offshore fund holds more than 90% of the assets under management in the Adani Group.
Hemindra Hazari, an independent research analyst in Mumbai, said: “It should be more clearly ensured who is the ultimate owner of the stock.”
Prohibited or not?Adani investors are concerned about three Mauritius funds
Except for the exchange documents sent this week, an Adani Group spokesperson declined to comment. Adani Group stated in a statement on June 14 that these overseas funds “have been investors in Adani Enterprises Limited for more than a decade.” “We urge all stakeholders not to be bothered by market speculation.”
In the same exchange filing on the same day, Adani Group stated that they had obtained written confirmation from the Registrar and Transfer Agency, stating that the offshore fund demat account holding Adani’s shares “has not been frozen.”
Albula and APMS stated in a separate statement dated June 14 sent by email via their management company IQ EQ Fund Services (Mauritius) Limited on June 14 that these funds are fully operational. “The fact is that the relevant NSDL entry of APMS Investment Fund Ltd. only shows a technical’account-level freeze’, which has absolutely nothing to do with its normal FPI trading activities,” APMS said. These funds did not answer the question of why they held Adani shares so concentrated, nor did they disclose the names of investors.
The stock price of Adani Green Energy Ltd., the tycoon’s most valuable asset, fell 7.7% this week. Adani Ports & Special Economic Zone Ltd. plunged 23% in four days, Adani Power Ltd., Adani Total Gas Ltd. and Adani Transmission Ltd. fell at least 18%, while flagship company Adani Enterprises fell nearly 15%.
In the past few years, the excitement of the Adani Empire surrounding ports, mines and power plants has been heating up, as the coal giant has set his sights on expanding beyond the dirtiest fossil fuels, seeking to align his commercial interests with The infrastructure priorities set by Prime Minister Narendra Modi are combined.
Since the beginning of 2020, investors have pushed some of the group’s stocks to soar by more than 500%, betting that the first-generation entrepreneur’s vigorous entry into renewable energy, airports, data centers and defense contracting will be rewarded. Earlier this month, Adani’s wealth approached $80 billion.
Despite few analyst reports, MSCI Inc.’s decision to include more Adani stocks in its Indian benchmark index increased the tailwind. In May, Adani’s three listed companies were included, bringing the total number of the group to five. The inclusion also led to more mandatory purchases by investors tracking the index.
BI analysts wrote last week that the rapid surge, coupled with stocks that are mainly held by overseas funds and have a small public float, pose a risk to Adani stock. This week’s events also brought the opacity of the group and its main non-founder shareholders into focus.
“I expect that the speculative cycle of Adani Group’s stock may have reached its deadline,” Smartkarma analyst Travis Lundy wrote in a report.
(Update the comments from Albula, APMS Fund in the ninth paragraph)
– With the assistance of Jack Witzig, Abhishek Vishnoi, Nupur Acharya, PR Sanjai and Kamlesh Bhuckory.