Mumbai: Indian billionaire Gautam Adani’s global wealth ranking faltered after a media report raised questions about some offshore investors, causing a rout in the six listed stocks of his conglomerate. Bloomberg’s billionaires’ index showed that the 58-year-old tycoon was worth 67.6 billion dollars by Wednesday’s close, up nearly 9 billion dollars from the previous week. As Asia’s richest man, he was closing the gap with Mukesh Ambani just days ago. Stocks of Adani Group fell on Thursday.
Several shares turned south on Monday after news broke that the accounts of Mauritius-based funds had been frozen by India’s national share depository due to insufficient information about the owners. Approximately 6 billion dollars of Albula Investment Fund, Cresta Fund, and APMS Investment Fund’s assets are held by Adani companies. According to Adani Group, the report was ‘blatantly wrong’ and was ‘done to intentionally mislead investors.’ Investors concerned about transparency rushed out of the deal. More than 90% of the Mauritius offshore funds’ assets are held in Adani group companies. ‘There should be greater clarity about who the final owners of the shares are,’ said Hemindra Hazari, an independent research analyst in Mumbai.
There has been no comment from Adani Group beyond the exchange filings sent out this week. These overseas funds have been investing in Adani Group for more than a decade, according to a statement dated June 14. In identical exchange filings, Adani group companies said they had written confirmation from Registrar and Transfer Agent that the offshore funds’ Demat accounts in which Adani shares were held were not frozen.
This week, Adani Green Energy Ltd. lost 7.7% of its value. It has been building up excitement over the past couple of years as Adani, a coal magnate seeks to dovetail his business interests with infrastructure priorities set by Prime Minister Narendra Modi as he looks beyond the dirtiest fossil fuel to expand. Several of the company’s stocks have soared 500% since the start of 2020, as investors bet the first-generation entrepreneur’s push into sectors like renewable energy, airports, data centers, and defense contracting will pay off. Adani’s wealth was close to $80 billion earlier this month.
Read more: Twitter India MD gets legal notice over Loni assault case
Furthermore, MSCI Inc. added more Adani stocks to its India benchmark index despite low analyst coverage. This brings Adani’s total to five listed companies. In addition, the inclusion resulted in more mandated purchases of index products by investors. The rapid rise coupled with the equity held by overseas funds with very little public float pose a risk to Adani shares, BI analysts wrote last week. As a result of this week’s events, the opacity around the group and its key non-founder shareholders have also been brought into focus.
Post Your Comments