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Shares in companies linked to Indian tycoon Gautam Adani, one of Asia’s richest men, fell sharply after the country’s largest securities deposit froze foreign fund accounts with billions worth of billions of dollars.
Four of the six listed Adani Group companies fell the maximum amount allowed by exchange rules on Monday, while billionaire Adani Ports & Special Economic Zone fell to 19%.
The fall followed an announcement by the National Securities Depository of India that it had frozen the accounts of the Albula investment fund, the Cresta fund and the Mauritius-based APMS investment fund. The Indian newspaper The Economic Times reported that the measure, which prevents funds from trading shares, is due to a lack of documentation on the beneficial ownership of the entities.
Adani’s net worth had risen from $ 44 billion to $ 78 billion this year, based on a rise in stock prices of companies linked to their apple energy conglomerate. This had propelled him to the position of The second richest man in Asia, sweeping with Chinese technology titans such as Alibaba’s Jack Ma and ByteDance founder Zhang Yiming, and within walking distance of the Reliance Industries chair Mukesh Ambani.
The fall in shares linked to Adani on Monday removed more than $ 6 billion from the tycoon’s net worth, according to Bloomberg figures, placing them at just under $ 71 billion.
Last year, the shares of Adani Transmission increased by 640%, the companies Adani by 860% and Adani Total Gas by 1.030%.
But analysts have expressed concern about stocks that have a small handful of funds abroad and that have a small public stock market.
Bloomberg Intelligence analysts wrote in a note last week that the concentration of stakes in Adani Total Gas, Adani Enterprises and Adani Transmission appeared to be “widespread.”
“Among the largest foreign investors are some Mauritius-based funds that own more than 95% of the assets of these companies,” analysts said. “These concentrated positions, along with negligible land ownership, create an asymmetric risk reward as large investors obviously avoid Adani.”
Adani Group declined to comment. NSD did not immediately respond to a request for comment.
The Indian stock market has recently arrived record highs although the economy is struggling to recover from a severe wave of coronavirus infections.
Index provider MSCI added three Adani shares to its India index in May.
Adani has attracted international partners in its bid to become one of the largest renewable energy companies in the world. Total in January bought a 20% stake in Adani Green Energy, which last month acquired the energy unit of India of the Japanese technology group SoftBank.
The infrastructure mogul has been criticized for his controversy Carmichael Coal Mine in Australia, which has been the subject of global environmental protests.
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