Adani shares dip over reports of investors' accounts being frozen

Ground Report | New Delhi: Monday, 14th June, media reports said National Securities Depository Ltd. (NSDL) froze accounts of three Mauritius-based funds. Albula Investment, Cresta, and APMS Investment collectively about $6 billion of shares in the Adani conglomerate. The news raised concerns about the Adani group, tanked their shares. Authorities are yet to cite the reason behind freezing the accounts. However, insufficient information on the owners or an unrelated 2016 case is probably the likely reasons for the action.

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Adani group, in a statement on Tuesday, clarified that while some of the funds' demat accounts were "Suspended for Debit", that did not affect their other dealings or shares in the Indian market. Shares traded mixed on Tuesday even after this statement. Yesterday, the shares were still facing pressure, with Adani Transmission, Adani Total Gas and Adani Power falling by 5% each. These stocks have seen a fall of over 16% in the last three sessions.

By Wednesday afternoon, the conglomerate had already lost $7 billion in stock value. Following this, Adani's CFO, Jugeshinder Singh, clarified things once again in an interview with NDTV. He explained how these funds have been investors in Adani Enterprises since 2010, well before the 2016 inquiry.

The funds hadn't made new investments in the conglomerate, but rather just received their various shares due to demergers, he added. He also emphasized that the Demat account in which the funds have stored Adani's shares aren't frozen. Despite this, uncertainty has persisted.

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Experts are of the opinion that the opacity surrounding the group and its non-founder stakeholders are adding to the uncertainty of investors. Moreover, some funds having concentrated holdings in Adani have led to increased share price volatility. Any negative activity involving these funds is likely to negatively affect the conglomerate as well. In such a scenario, transparency is the best way to avoid future incidents of this sort.

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