The stock market traded flat last week. The market's major indices Sensex and Nifty fell marginally up to 0.75%, but in these 5 trading days, the shares of Adani Group created a stir. These were down throughout the week, with some stocks falling as much as 25%. At the same time, the share value of Adani Group companies fell by more than Rs 1.5 lakh crore.
As a result, Gautam Adani is now ranked third in the list of Asia's richest businessman. Last month on May 21, he became the second richest person in Asia. At that time the difference between the net worth of Adani and Ambani was Rs 75,000 crore. But between June 14 and 18, the result of a sharp fall in the shares of Adani Group, that this gap increased to Rs 1.25 lakh crore. Now market experts are advising to avoid investing in the shares of Adani Group.
In fact, before the market opened on June 14, news came that there are investments of three such foreign investors in Adani Group companies, whose details are not even with the depositories. Due to this, there was a huge fall in all the 6 stocks of Adani Group listed in the market. Shares fell up to 25% on the trading day.
In a week, the shares of Adani Power, Transmission, Adani Total broke down by 5% every day between Monday and Friday i.e. lower circuit. Similarly, the shares of Adani Green Energy also hit a lower circuit on June 14, 17 and 18 and the shares fell 5% on these 3 days. Here the lower circuit means that the shares fell to the maximum extent of the fall in a day.
Shares of Adani Total Gas, Adani Transmission and Adani Power lost over 22% to investors in the week. According to experts, there is a possibility of further decline in these stocks. Despite this, the Adani Group has given a clarification on the matter.
The group's CFO has called it a "malicious attempt to push forward a completely false report". He also informed that the Registrar and Transfer Agent has confirmed that the accounts of the FPIs have not been frozen. After that, on June 15, the Adani Group issued a statement saying that some Demat accounts are in the 'suspended for debit' category. This step was taken on a directive of SEBI issued on 16 June 2016.
The foreign companies which are believed to be bogus are Albula Investment Fund, Cresta Fund and APMS Investment Fund. According to the National Security Depository Limited (NSDL), the total investment of these companies in Adani's companies is 43,500 crores, but SEBI does not have information about them. Also, the owner of this money is not known. Therefore, action has been taken against them under the Money Laundering Act. According to the NSDL website, these accounts were frozen on or before May 31.
The market value of the companies has also come down sharply due to the continuous fall in the shares. The total market cap of the 6 companies included in the group stood at Rs 9 lakh 42 thousand 895 crores at the close of the market on June 11, which decreased by Rs 1 lakh 52 thousand to Rs 7 lakh 90 thousand 278 crores after the closing on June 19. That is, the market value of Adani Group decreased by Rs 1.52 lakh crore in 5 business days.
Chandan Tapadia, vice-president, Motilal Oswal Financial Services, says that investors should avoid investing in the shares of Adani Group for some time. Those who have investments would be advised to hold the position. He said investors would be advised to invest in these stocks in another quality till the matter is over.
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