Several foreign funds, including those based in Mauritius, have reduced their holding in the Adani Group companies for the quarter ended September (Q2).
Elara India Opportunities Fund’s holding in flagship Adani Enterprises has dropped below 1 per cent in Q2 from 1.35 per cent in the June quarter, data from primeinfobase.com show. The fund’s holding in Adani Energy Solutions has reduced to 1.97 per cent from 3.61 per cent in the same period.
APMS Investment Fund’s holding in Adani Energy Solutions and Adani Power has seen a reduction in the September quarter. Cresta Fund’s holding in Adani has fallen below 1 per cent in Q2 from 1.52 per cent in the previous quarter. Green Energy Investment’s holding in Adani Green Energy fell below 1 per cent (from 1.26 per cent).
Disclosure of holdings of FPIs is only available for holdings in a company greater than 1 per cent.
In its report earlier this year, Hindenburg Research had alleged that Mauritius-based entities such as APMS Investment Fund, Cresta Fund, LTS Investment Fund, Elara Opportunities Fund and Opal Investments collectively held shares totalling $8 billion in Adani Group companies and could be linked to the promoter group.
The Adani Group, however, had refuted these allegations, saying that these entities were public shareholders and innuendos that they were related parties of the promoters were incorrect.
A spokesperson for the Adani Group said it had no comments to offer.
SEBI’s diktat for granular disclosures for FPIs that hold concentrated holdings in Indian equities and group companies becomes applicable from November 1.
There were over 200 FPIs with over 50 per cent of their equity investments in a single stock or group of NSE listed companies, according to data for the quarter ended June. These have invested over ₹1.98-lakh crore in over 140 corporate entities, the prominent ones being Adani, OP Jindal, GMR and Hinduja groups. Of these, 122 had 100 per cent of their holding in a particular company or group.
Overall, the percentage of FPI shareholding in Q2 saw a decline in eight of the 10 Adani Group companies. FPI shareholding in Adani Enterprises saw the biggest drop of 4.82 percentage points to 18.05 per cent, whereas shareholding in Adani Power rose 5.56 percentage points to 17.51 per cent during the quarter.
To be clear, FPIs turned net sellers in Indian equities in September, after remaining net buyers in the previous six months, offloading shares worth $1.7 billion. A risk-off sentiment could have dictated some of the actions taken by these shareholders in Adani Group companies as well.
“Reduction in institutional holding could be determined by a number of factors including the prospects of the company, time horizon and macro-economic conditions, and may not necessarily point to corporate governance issues,” said Deepak Jasani, head of retail research at HDFC Securities.
Notably, the holdings of domestic institutional investors rose in eight Adani companies during the quarter, with the biggest shift seen in ACC (up 3.44 percentage points) and Ambuja Cements (1.11 percentage points). Five Adani firms – Adani Energy Solutions, Adani Green Energy, Adani Total Gas, Adani Wilmar and NDTV – saw a rise in retail holdings. The prominent foriegn funds that raised their holdings in Adani companies in Q2 include GQG Partners Emerging Markets Equity Fund and Goldman Sachs Trust II.