Indian police detain Indian National Congress (INC) activists hilding cutout posters of Gautam Adani chairman and founder of Adani Group during an anti-government protest demanding an investigation into the Adani Group fraud, near Governor House in Kolkata, India, 13 March 2023. (Photo EPA-EFE/PIYAL ADHIKARY)Investments by local equity mutual funds in the group accounted for only 0.9% of the industry’s $182-billion in assets at the end of March, according to data compiled by Bloomberg. That’s down from nearly 2% as of 31 December.
The embattled conglomerate at one point saw $153-billion erased from its market value in the selloff following the release of Hindenburg Research’s scathing report on 24 January. The group has vehemently denied allegations made by the short-seller, and has since trimmed down capital spending for growth and said that its founders have paid back share-backed loans.
Local managers’ continued caution is at odds with the optimism shown by GQG Partners’ star investor Rajiv Jain, who spent nearly $2-billion to scoop up stakes in four Adani stocks in early March. The move acted as a catalyst for a rebound of more than $30-billion in the group’s market value.
While Indian funds’ overall exposure has dropped, some players such as Mirae Asset Investment Managers and HSBC Asset Management India were buyers in March. However, shares purchased by them in two group entities totaled less than 700,000, according to data from Nuvama Wealth Management.
A historical analysis by Bloomberg Intelligence in 2021 showed that local fund managers have had smaller holdings in companies that reported governance issues than overseas and individual investors. BM/DM
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