Post Hindenburg, investors rushed in to buy Adani shares at low price

In January, this year, the US based short-seller Hindenburg Research released a report alleging the Group of brazen stock manipulation and accounting fraud, which the port-to-energy conglomerate had denied.

The report led to a massive fall in the share prices of all the Adani Group companies. This also resulted in the Group calling off the fully subscribed Rs 20,000 crore follow-on public offer (FPO) of Adani Enterprises in February.

Ignoring the massive sell-off in the Adani Group stocks, the total number of shareholders in nine companies increased to 71.08 lakh crore as of end March 2023.

The retail shareholding in Adani Enterprises Ltd (AEL), the Group’s flagship, increased to 7.87 per cent as of March 2023 from 6.53 investors as of end-December 2022.

The shareholding of retail investors in Adani Port and Special Economic Zone (APSEZ) rose to 7.75 per cent in Q4 of FY2023 from 6.33 per cent in Q3.

The retail shareholdings in Adani Green Energy, Adani Power and Adani Transmission and Adani Total Gas Ltd increased to 24.16 per cent, 13.32 per cent, 3.85 per cent and 2.73 per cent respectively as of March 2023 from 22.96 per cent, 12.15 per cent, 2.71 per cent and 1.84 per cent respectively as of end-December 2022.

According to CNI Research’s Chairman and Managing Director Kishor Ostwal, “Typically, this was a missed out rally. When the share price went up from Rs 500 to Rs 4,000, retail investors did not participate because they did not have faith. So when the stock price corrected, for whatever reason, they thought it was an opportunity to buy.”

He said the fundamentals of the Adani Group remain changed before or post the crash in stock prices.

In Adani Wilmar, individual investors’ stake increased to 10.68 in the March 2023 quarter from 10.36 per cent in December 2022 quarter.

In Ambuja Cements, retail investors owned 11.76 per cent stake as of March 2023 as against 9.06 per cent held in December 2022. In the case of ACC, retail investors held 13.73 per cent stake in Q4 FY23 compared to 12.7 per cent in Q3 FY23, the data showed.

Mutual funds, however, stayed away from the Group companies’ stocks. While the percentage holding of MFs declined in four Group companies, it remained stagnant in four stocks. They increased stake in one of the companies, the Group said.

The company said, in Dec 20222, the net exposure of foreign institutional investors (FII)/domestic institutional investors (DII)/ high networth investors (HNI) was around Rs 16,200 crore in terms of value

It could be noted that in March, the Supreme Court had set up a six member expert committee headed by its former judge Justice A M Sapre to investigate whether there has been a regulatory failure in dealing with the alleged contravention of laws pertaining to the securities market by the Adani Group or other companies after Hindenburg Research.

The other members include O P Bhat, K V Kamath, Nandan Nilekani, Somsekhar Sundaresan and Somsekhar Sundaresan and Justice JP Devdhar.The apex court had asked the committee to submit a report in a sealed cover in two months. It also directed the Securities and Exchange Board of India (SEBI) Chairperson to ensure requisite information is provided to the committee.