An analysis of quarterly foreign shareholding trends in the six Adani Group companies---Adani Enterprises, Adani Total Gas, Adani Transmission, Adani Green, Adani Ports, and Adani Power shows a rise in the numbers of FPIs from the September quarter of 2020.
In Adani Enterprises, the flagship entity of the Group, the number of FPIs have jumped more than threefold to 410 in March 2023 from 133 in September 2020. In Adani Total Gas, the number of overseas investors has gone up to 532 from 63. The number of FPIs in Adani Transmission has shot up to 431 from 62 and in Adani Green to 581 from 94 in September 2020.
The holdings of ACC, Ambuja Cements, and NDTV have not been considered, as they were acquired by the Group later, while Adani Wilmar was listed in February 2022.
The capital market regulator is probing allegations of breaches in overseas investor ownership and minimum public shareholding rules by the Adani Group, which was highlighted by the Hindenburg Research in late January this year that triggered a crash in the conglomerate's stocks. The Adani Group has rejected the report and denied any wrongdoing.
Sebi had started a probe into the shareholding patterns of the Ahmedabad-based conglomerate in October 2020 after its internal surveillance system threw up alerts on the concentration of certain foreign holdings in six listed Adani companies. Since then, it has come to Sebi's notice that there is a diversification in FPI shareholding in these firms, the person said without sharing specific details.An Adani Group spokesperson said it will not comment on 'market related activity'. An email sent to Sebi didn't elicit any response till press time.Sebi is in the process of introducing tighter disclosure requirements for FPIs to prevent the misuse of overseas investment routes and curb public shareholding norm violations. In its public discussion paper on May 31, the regulator had said it has observed that some FPIs have put in a "substantial portion" of their equity portfolio in a single investee company/company group. The regulator didn't name any group in the paper.
Earlier in May, the six-member expert panel set up by the Supreme Court to identify if there was a regulatory failure in dealing with the alleged contravention of securities laws in relation to the Adani Group had said Sebi had drawn a blank in its probe regarding the source of funds of the foreign institutional investors in the Gautam Adani-owned entities.
"It has been a long-standing suspicion of Sebi that some of the public shareholders are not truly public shareholders and they could be fronts for the promoters of (Adani) companies," read the May 6 report submitted by the Supreme Court-appointed panel on the Adani Group.
As per exchange data the stakes of various FPIs that appeared in the shareholding lists before July-September 2020 appeared to have reduced in the past two-and-a-half years. It cannot be ascertained if these investors had exited Adani Group companies entirely, because exchange data show ownership of only those investors holding 1% and above in a company. It is possible that the holdings of these FPIs have merely fallen below 1%.
For instance, Mauritius-based Albula Investment Fund, which held more than 2% stake each in Adani Enterprises, Adani Green, Adani Total Gas and Adani Transmission in September 2020, may have either exited or reduced its stake in all the four companies.
Albula’s name did not appear in Adani Enterprises’ public shareholding list from the March 2022 quarter onwards. Likewise, its name did not appear in the shareholders list of Adani Green and Adani Total Gas from the December 2021 quarter.
The holdings of another Mauritius-based entity Cresta Fund in Adani Group companies has also seen a decline in the period.
FPI count in six Adani companies on the rise since Sept 2020 - Economic Times
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