Four out of six Adani Group stocks hit lower circuit

Shares of Adani Group continued their downward trend for the second day in a row following a written reply in Lok Sabha by the minister of state for finance Pankaj Chaudhary on investments by Mauritius-based companies in Adani group.

The minister said on Monday that accounts of three of the six Mauritius-based funds, that have invested most of their money in Adani Group firms, were frozen in 2016 over the issuance of Global Depository Receipt (GDR) by certain listed firms. No freeze was ordered for their holding in other firms.

In today’s session shares of all listed Adani Group companies were trading in the red, with four out of six Adani stocks hitting the lower circuit. Shares of Adani Power were locked in a lower circuit of 5% at Rs 97.20, similarly, shares of Adani Transmission was frozen in lower circuit of 5% at Rs 920.55 and even Adani Total Gas was locked in only seller circuit down by 5% at Rs 813.60, Adani Green Energy shares were also locked in lower circuit of 5% at Rs 932. On the other hand, shares of Adani Enterprises was trading at 1,357.90 (down 1.64%), whereas Adani Ports and Special Economic Zone was down by 0.71% at Rs 668.95, on the BSE.

Ongoing investigations

“Sebi is investigating some Adani Group companies with regard to compliance with Sebi regulations,” Chaudhary said without giving details.

That apart, DRI (Directorate of Revenue Intelligence) “is investigating certain entities belonging to the Adani Group of Companies under laws administered by it,” added Chaudhary.

The minister did not name which of the Adani Group companies were being investigated by Sebi and DRI. He also did not elaborate on the nature of the violation.

He also mentioned that the Enforcement Directorate (ED) wasn’t investigating the Adani Group.

Biggest weekly fall

Shares of companies controlled by Indian billionaire Gautam Adani recorded their biggest weekly fall last month on reports that accounts of three of the six Mauritius-based funds that have invested most of their money in Adani Group firms had been frozen by the national share depository. The cumulative market capitalization of all listed companies of Adani Group fell by Rs 1,58,909.89 crore or 16.72% to Rs 7,91,446.90 crore on June 18, 2021.

The Adani Group on June 14 denied the report of the freeze, calling it “blatantly erroneous”. A day later it clarified that three demat accounts of Cresta Fund Ltd, Albula Investment Fund Ltd and APMS Investment Fund were “suspended for debit”, adding to the confusion over the status of the offshore funds.

Group’s founder-chairman Gautam Adani on July 12 stated that the diversions caused by “twisted narrative” would not impact the group in the long run.

“Unfortunately, some of our small investors were affected by this twisted narrative which seemed to imply that companies have regulatory powers over their shareholders and that companies can compel disclosure,” he had said.

Company statement

Commenting on the issue, Adani Group spokesperson said the conglomerate has always been compliant with Sebi regulations and it hasn’t received any request from the market regulator recently.

On the DRI probe, the spokesperson said Adani Power was show caused five years back but the investigating agency had found “no over-valuation of equipment” and the matter is before the appellate tribunal.

“We have always been transparent with all our regulators and have full faith in them,” the spokesperson said. “While we have always been fully compliant with applicable Sebi regulations, we have made full disclosure to SEBI on specific information requests from them in the past. However, we have not received any communication or information requests recently.” With regard to the DRI matter, the spokesperson said Adani Power was issued a show-cause notice by DRI about five years back.

“Subsequently, DRI passed an order in favour of Adani Power confirming that there is no over-valuation of equipment,” the spokesperson said. “The department has approached the Tribunal and the matter stands sub judice now.” It wasn’t clear which department approached the tribunal and if it was to challenge the ‘clean chit’ over alleged over-valuation of coal imports to get higher traffic for electricity generated from it.

“Adani Group is a responsible corporate citizen and strongly believes in compliance of applicable laws and adheres to prudent corporate governance framework,” the group spokesperson added.