The surfacing of reports which stated that accounts for three foreign portfolio investors (FPIs) having a major stake holding were frozen due to non-compliance with KYC (Know Your Client), led to a sharp fall in the shares of Adani group companies, which shed more than $6 billion on Monday, 14 June.
The three FPIs are Albula Investment Fund, Cresta Fund and APMS Investment Fund, which together own shares worth more than Rs 43,500 crore in Adani Enterprises, Adani Green Energy, Adani Transmission, and Adani Total Gas.
According to the Adani Group, after this news emerged, the company took information about the matter from the registrar and transfer agent. According to the information provided to the exchange, the company has a letter dated 14 June, which states that the demat accounts of the Adani Group will not be frozen.
How Did the Shares Fall?
On Monday, after the market reacted to reports that the National Securities Depository Limited (NSDL) has frozen the accounts of three FPIs, shares of the group company fell sharply.
The three FPIs, are all registered in Port Louis, Mauritius, with Albula and APMS having the exact same address as well, Money Control reported.
Adani Group flagship Adani Enterprises closed down 6.3 percent after plunging as much as 25 percent, its steepest fall in nearly a decade.
Accused of Misleading Investors
In a letter provided to the exchange, the Adani Group also targeted the report, terming the news of the demat account as "wrong". The company said:
"We regret to inform that this report is clearly false and intentional to mislead investors. This is causing a massive loss to the reputation of the group and investors' money."
Shares of Adani Group Companies Plunged as Much as 25 Percent
Adani Group's six companies: Adani Enterprises, Adani Ports and Special Economic Zone, Adani Power, Adani Transmission, Adani Green Energy and Adani Total Gas are listed in the stock exchange.
The report had a huge negative impact on all these companies. At one point Adani Enterprises was down 25% in intraday trade. Adani Ports, part of the NSE pack, was also down 19% in trading. Rest of the four stocks were locked in their lower circuit, weakening by 5%.
Adani Enterprises and Nifty 50-listed Adani Ports and Special Economic Zone plunged the most, dropping by 15% each.
Shares Recover After Adani Group Denies Accounts Being Frozen
After the clarification on the issue by the Adani Group, there was a slight recovery in the prices of these shares.
At the close of the market, Adani Enterprises closed at Rs 1,508, down 6%. Similarly, Adani Ports also improved significantly and remained weak at 9%.
Adani Green's stock rose 0.11% after the recovery, staying in the green mark. Adani Transmission, Adani Power and Adani Total Gas closed in their lower bands.
(With inputs from MoneyControl)