National Securities Depository Limited (NSDL) has given a shock to one of Asia’s richest persons, Gautam Adani. The NSDL has frozen the accounts of three foreign portfolio investors who have invested heavily in the Adani Group companies. The Economic Times broke out this news via a story today. Following the story, the Adani Group shares collapsed on today’s stock exchanges. Within just an hour, all the shares of the group hit the ‘lower circuit’ and Adani’s net wealth evaporated by $7.6 billion (about Rs 55,000 Crores).
NSDL froze Albula Investment Fund, Cresta Fund, APMS Investment Fund, which have shares in the companies of Adani Group worth Rs 43,500 crore. Under the Money Laundering Prevention Act., full details of the ownership of these accounts have not been disclosed. The Economic Times reported that these accounts were frozen on or before May 31, and as these accounts have been frozen, these funds can neither sell old securities nor buy new securities.
According to the new market rules, it is mandatory to disclose customer documentation of FIPs. This means that details like fund managers and common ownership have to be disclosed, failing which their Demat accounts would be frozen. This is exactly what happened with the Adani Group, where the accounts of the three FIPs were frozen after none of those details were disclosed.
Moreover, according to SEBI registration, these three FPI companies have the same address from Port Louis in Mauritius. They also do not have separate websites. This has led to the speculation that these three funds could be fake ones. These three fund companies together have 6.82% shares in Adani Enterprises, 8.03% in Adani Transmission, 5.92% in Adani Total Gas and 3.58% in Adani Green. On the other hand, Adani Group shares rose from 200 to 1000% last year, and SEBI’s investigation on the same is still going on.
Adani Group shares fell steeply in the wake of this news. Adani Group has six shares listed in stock markets, and all of these hit the lower circuit level in just an hour. At 10 AM, Adani Enterprises’ share fell by 25%, to a low of Rs 1,201.10. Adani Ports, Adani Green Energy, Adani Total Gas, Adani Power and Adani Transmission shares also fell. This resulting in the stopping of Adani Shares for some time. Adani’s net wealth declined by $7.6 Billion this morning, as a result, and by 12:30 PM, the share value was trading at a loss of 11.34%.