NEW DELHI: India’s second richest person Gautam Adani saw his net worth eroding by $4-5 billion on Monday after shares of its group companies tumbled following a report that the National Securities Depository Limited (NSDL) has frozen demat accounts of three foreign portfolio investors (FPIs) which have significant exposure to Adani group companies.
Shares of Adani Enterprises on Monday crashed 25 per cent intra-day to Rs 1,201 on the BSE. Similarly, Adani Ports and Special Economic Zone (APSEZ) plummeted 19 per cent during the day to Rs 681.50 while Adani Total Gas, Adani Transmission, Adani Power and Adani Green Energy shed 4-5 per cent of their value.
This unexpected meltdown took place after a media report that said that NSDL had frozen accounts of three Mauritius-based FPIs — Albula Investment Fund, Cresta Fund, and APMS Investment Fund —which owns shares worth over Rs 43,500 crore in four Adani firms.
These three funds together hold 6.82 per cent in Adani Enterprises, 8.03 percent in Adani Transmission, 5.92 per cent in Adani Total Gas and 3.58 per cent in Adani Green.
A statement by the group, later in the day, calling the account freezing reports “blatantly erroneous”, limited the damage to some extent.
“This is causing irreparable loss of economic value to the investors at large and reputation of the group... We requested Registrar and Transfer Agent, with respect to the status of the Demat Account of the aforesaid funds and have their written confirmation vide its e-mail dated 14th June, 2021, clarifying that the Demat Account in which the aforesaid funds hold the shares of the Company are not frozen,” the statement noted.
Overall, the market capitalization of Adani group stocks fell nearly Rs 54,000 crore on Monday, taking a toll on Adani’s notional wealth. Multiple reports suggest that billionaire Adani’s wealth eroded by $4-5 billion in just one day.
“We suggest investors be cautious on Adani group stocks, trading at very high valuations compared to peers. Buy on dips or averaging the buy position should be avoided for the time being,” warned Yash Gupta, Equity Research Associate at Angel Broking.