Adani Group: What's Behind the Share Price Fall?

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Background

Adani group is an Indian multinational conglomerate. It was founded by Gautam Adani and is headquartered in Ahmedabad, Gujrat. Initially it was engaged in the commodity trading business but subsequently expanded in many other businesses like logistics, defense, aerospace, financial services, real estate, agriculture, etc. and came up with many subsidiaries.  

Performance Records

Adani Group maintained consistently rising revenues since 2009. As it can be seen in the chart given below, they earned whooping profit over the years, except for a huge downfall in the year 2017. This was because in August 2017, Indian Custom alleged that Adani groups have diverted funds from the company's book to Adani family tax havens overseas.  

Source: Business Standard

In the below graph, we can see the rising slope of the market performance of the firm in the preceding financial year. 

The Downfall of 2021

The group was receiving a positive response in the share market in the financial year 2021 as well. However, the group witnessed a fall after 4th June 2021 as can be seen in the graph.



The flagship company of the group was down by 3.51% on BSE, Adani Port was down by 5%, and Adani Green Energy down by 4.29%. Adani Total Gas, Adani Transmission, and Adani Power were stuck to their lower circuit limits for the third consecutive days on BSE. The share prices of listed companies of the group started falling from Monday, after a report indicating that NSDL has frozen three FPI accounts namely Albula Investment Fund, Cresta Fund, and APMS Investment Fund owning Adani Group shares worth ₹43,500 crores. These companies were barred from any further trading, on the grounds of insufficient disclosure of information regarding beneficial ownership according to the Prevention of Money Laundering Act. Although it was later clarified that the action taken by NSDL was old yet rush in the market to sell Adani Groups' shares was witnessed. 

Fishy Information

It is reported that the above mentioned three companies are registered at the same address in Mauritius. Even two more Mauritius-based financing companies holding shares of Adani Groups namely LTS Investment Fund and Asia Investment Corp are also registered at the same address. These five funds are still untraceable. Also, other major shares of the group are held by trusts controlled by Adani and only about 25% of its shareholdings are that of the public. Adding on to this, was the tweet of Sucheta Dalal, the one who also played a role in exposing the famous Harshad Mehta’s scam. Have a glance at her tweet.

This was all about the Adani Group buzz that has rolled up in business news recently. Hope you liked the content. You can also give your feedback and topic suggestions below in the comment box. 

Sources:

  1. https://timesofindia.indiatimes.com/business/india-business/Adani-Enterprises-MD-arrested-for-custom-duty-evasion/articleshow/5623927.cms
  2. https://www.indiatoday.in/business/story/explained-why-adani-stocks-are-falling-on-the-stock-market-1815984-2021-06-17
  3. https://www.indiatoday.in/business/story/nsdl-freezes-3-fpi-accounts-owning-adani-group-shares-worth-rs-43-500-crore-1814494-2021-06-14
  4. https://www.business-standard.com/article/markets/explained-mystery-behind-nearly-rs-2-trn-slump-in-adani-group-shares-121061800963_1.html




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