Exclusive: After $7 Billion Loss In Stock Value, Adani CFO's Explanation

Foreign portfolio investors had invested in Adani Group's incubation entity Adani Enterprises well before 2010 and they are not new investors, Jugeshinder Singh, CFO, Adani Group told NDTV in an exclusive interview in the backdrop of the recent sharp dip in the group's stock valuation.

Shares of companies controlled by billionaire Gautam Adani had dived in Monday's session, leading to a slide in stock valuation to the tune of $7 billion, after Economic Times reported that three foreign portfolio investors' (FPIs) accounts - Albula Investment Fund, Cresta Fund and APMS Investment Fund - were frozen by the National Securities Depository Limited (NSDL).

"These entities have been investors in our incubation company Adani Enterprises well before 2010. In 2015, we demerged Adani Ports and SEZ from Adani Enterprises; so these entities got their proportion of shares. Then, we demerged Adani Transmission, Adani Green Energy and Adani Total Gas. As the demergers happened, all shareholders of Adani Enterprises kept getting their proportion of shares as these were vertical demergers and it is not that new investments have come in," Mr Singh said.

The NSDL website had reportedly showed the accounts of Albula Investment Fund, Cresta Fund and APMS Investment Fund as being frozen without citing a reason.

The Adani Group, however, rejected the media reports on the very same day as being "blatantly erroneous." "We regret to mention that these reports are blatantly erroneous and is done to deliberately mislead the investing community. This is causing irreparable loss of economic value to investors at large and reputation of the group," Adani Enterprises said in a stock exchange filing.

The company referred to an e-mail from the "Registrar and Transfer Agent" saying "that the demat account in which the aforesaid funds hold the shares of the company were not frozen."

Due to vertical demergers in the company from time to time, these foreign investors received their proportion of shares in the demerged entities of Adani Enterprises, Mr Singh said.

"Look at Adani Ports' annual growth rate, over double digit and a market leader. I would simply say this - you take India's best IT company, India's best FMCG company, India's best bank and you put Adani Ports, Adani Green or Adani Transmission alongside them and look at our growth rate," Mr Singh emphasized.

The three funds were among the top 12 investors and owned about 2.1 per cent to 8.91 per cent stakes in five Adani Group companies as of March 31, 2020, as per annual investor presentations.