Hindenburg Report: Rs 41,814 Crore in Mutual Fund Investments Tied to 10 Adani Group Companies

                                      

Among the 10 Adani group companies, Adani Ports and SEZ has the largest mutual fund exposure at Rs 13,024 crore, followed by Ambuja Cements with Rs 8,999 crore, ACC at Rs 7,668 crore, and Adani Enterprises with Rs 7,291 crore.

A recent report by US-based short-seller Hindenburg Research, which alleges involvement of SEBI Chairperson Madhabi Puri Buch and her husband Dhaval Buch in Adani Group’s offshore funds, has spotlighted the Rs 41,814 crore worth of mutual fund investments in 10 Adani group companies.

On August 10, Hindenburg Research claimed that whistleblower documents accused SEBI’s Chairperson Madhabi Buch and her husband of having a stake in obscure offshore entities linked to Adani.

In response, Madhabi Puri Buch and her husband Dhaval Buch issued a joint statement denying Hindenburg Research’s allegations that the SEBI chairperson held a stake in entities connected to Adani.

By the morning of August 12, shares of Adani group companies were largely declining. Adani Ports and SEZ was down by 2.44 percent at Rs 1,496.75, Ambuja Cements was flat at Rs 628.25, ACC dropped 1.49 percent to Rs 2,316.35, and Adani Enterprises fell by 4.10 percent to Rs 3,054.50 as of 9:45 AM (IST).

                                           

How Mutual Funds Are Invested

Currently, 11 Adani group companies are listed in the Indian markets, including Ambuja Cements, ACC, Adani Ports and SEZ, Adani Enterprises, Adani Power, Adani Energy Solutions, Adani Green Energy, Adani Total Gas, Sanghi Industries, Adani Wilmar, and New Delhi Television (NDTV). However, mutual funds do not hold any investments in NDTV.

According to Value Research data, as of July 2024, Adani Ports and SEZ has the highest mutual fund exposure among the 10 companies, at Rs 13,024.22 crore, followed by Ambuja Cements (Rs 8,999.25 crore), ACC (Rs 7,668.38 crore), and Adani Enterprises (Rs 7,290.63 crore).

                                           

                                              

In terms of active versus passive investments, ACC has the smallest allocation by passive mutual funds at 0.8 percent. On the other hand, Adani Wilmar has the highest passive mutual fund investments, with 100 percent of its holdings coming from these funds.

Over the past two years, Adani group stocks have seen a consistent increase in active mutual fund investments.

Of the total Rs 41,813.57 crore invested by mutual funds, Rs 11,777.36 crore is held by passive mutual funds, and Rs 30,036.21 crore is in active mutual fund schemes.

Highest Mutual Fund Investments

Adani Ports and SEZ has the highest mutual fund participation, with 111 schemes collectively investing Rs 13,024.22 crore in the company. Out of this, passive funds account for 55.9 percent, or Rs 7,284.32 crore.

SBI Nifty 50 ETF has the highest invested amount in Adani Ports, at Rs 1,520.59 crore, followed by Kotak Equity Arbitrage Fund with Rs 701.90 crore, and SBI Arbitrage Opportunities Fund with Rs 649.12 crore.

In terms of percentage of net investments, DSP Dynamic Asset Allocation Fund has the highest exposure at 4.17 percent (amount invested: Rs 133.78 crore), followed by NJ Arbitrage Fund at 3.99 percent (Rs 15.44 crore), and DSP Equity Savings Fund at 3.04 percent (Rs 40.99 crore) in Adani Ports and SEZ.

    

                                       

Lowest Passive Share

Cement major ACC had the lowest passive mutual fund share at 0.8 percent. Of the total Rs 7,668.38 crore invested by 140 schemes, only 32 passive schemes had invested Rs 63.47 crore by the end of July 2024.

HDFC Mid-Cap Opportunities Fund had an exposure of Rs 1,149.44 crore in ACC, followed by Mirae Asset Large & Midcap Fund with Rs 572.26 crore, and SBI Contra Fund with Rs 373.88 crore.

In terms of percentage of net investments, PGIM India Arbitrage Fund had the highest exposure at 7.56 percent, followed by UTI BSE Housing Index Fund (3.42 percent), and Kotak BSE Housing Index Fund (3.42 percent).

       

                                         

Highest Passive Share

Apart from Adani Wilmar, which has the highest passive mutual fund investments at 100 percent, Adani Green Energy also has a significant passive mutual fund exposure at 92.1 percent, followed by Adani Total Gas at 91.8 percent.

In Adani Wilmar, a total of 24 schemes have invested Rs 14.97 crore, while 45 mutual funds have invested Rs 313.70 crore in Adani Green Energy.