Adani Group stocks partly reversed losses on Tuesday following the clarification issued by the National Securities Depository Ltd (NSDL) in the foreign fund investors case. NSDL is still to clarify why its website earlier showed that funds of Albula Investment Fund, Cresta Fund and APMS Investment Fund, the three FPIs that own over Rs 43,000 crore in Adani Enterprises, Adani Green Energy, Adani Transmission, and Adani Total Gas, had been frozen, leading to Adani Group stocks sliding on Friday and Monday.
Adani Ports on Tuesday clarified that “these reports are blatantly erroneous and are done to deliberately mislead the investing community” leading to irreparable loss to the investors at large and investors of the group. This view seems to be shared by many market watchers, who point out that in the business world it is not unusual for rivals to try to pull down anyone who is outdoing the others.
In the last 15 to 20 years, Adani group of companies have put in sizable investments in creating infrastructure assets and now these assets are bringing in sizable cash and thus good returns for the investors. It is obvious that for foreign investors projects that are being successfully implemented and promise good returns will be attractive, states Deven Choksey, Managing Director of KR Choksey Investment Managers Private Limited.
The important part of investing in a company or a group of companies is that investors are finding it extremely rewarding. In the case of Adani group the assets they have created hold potential as far as implementation and monetization is concerned.
“In this case we are talking about Rs. 40,000 crore being invested in a particular group which has a market capitalization of Rs. 12 lakh crore. The amount is not much when considering that many global investors have much bigger appetite,” states Choksey, who sees nothing fishy in foreign investors’ interest in Adani infrastructure projects. “If the fundamentals are strong, why get disturbed,” Choksey adds.
If the rivalry theory is to be believed, the question remains who benefited from the fall in Adani Group share prices? Only the regulator will be able to tell whether market manipulation was indeed behind the rumours.
“While business rivalry cannot be ruled out it is too early to pinpoint the real source of the rumours including whether it originated from someone connected to the promoter or not. Or even if someone is trying to make money or buy up shares as the price fell on Friday and again on Monday,” says V Nagappan, chief mentor, MSE FSL.
The Chennai based stock-broker states that many are suspecting that market manipulators were behind the turmoil in Adani shares “as it is not a fresh news or a false news as the NSDL website did carry the information, which has since been removed and denied….”
B Sriram, director of Dhwani Stocks and Shares, points out that there is nothing unusual about the events related to Adani group shares as rumours hitting stock prices is seen in all bull markets across the globe.
“While conspiracy theory is very fine, it could also have been driven by people who wanted to escape damage, having taken contra positions. We will have to wait to know the true picture till SEBI reveals the details after a probe, which may take three to six months,” says Sriram.
Going by the records there has been no sudden buying of Adani Group stocks by FPIs in the last three or six months. The three FPIs have been invested in the group for the last several years. They were holding stocks in the Adani Group even before it demerged in September 2018, after which they continued to hold the same proportion of shares in the six demerged entities.
What was behind this sudden hullabaloo is not known. Conclusively only the regulator can establish what happened and who benefited as the timing is suspect and there seems to be some vested interest behind the spread of the news.