Hindenburg report: Rs 41,814-crore mutual fund money riding on 10 Adani group companies

Hindenburg Research has levelled allegations of conflict of interest against Securities Exchange Bureau of India (SEBI) chairperson Madhabi Puri Buch.

A fresh report by US-based short-seller Hindenburg Research alleging that SEBI chairperson Madhabi Puri Buch and her husband Dhaval Buch were involved in Adani Group's offshore funds has brought into focus the  Rs 41,814 crore worth of investments made by mutual funds in 10 Adani group companies.

Hindenburg Research on August 10 said that whistleblower documents have alleged that SEBI’s Chairperson Madhabi Buch and her husband had a stake in the obscure offshore entities linked to Adani.

In a joint statement, Madhabi Puri Buch and her husband Dhaval Buch have denied the allegations levelled by Hindenburg Research that the SEBI chairperson had a stake in the entities linked to Adani.

On the morning of August 12, Adani group shares were largely down. Adani Ports and Special Economic Zone Lts was trading around 2.44 percent lower at Rs 1,496.75, Ambuja Cements was flat at Rs 628.25, ACC was down by 1.49 percent at Rs 2,316.35 and Adani Enterprises was down 4.10 percent at Rs 3,054.50 at around 9.45 AM (IST).

Live: Hindenburg Research Report Highlights

How mutual funds are invested

There are 11 Adani group companies currently listed in the Indian markets - 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.

However, mutual funds hold no investments in NDTV alone.

As per data available with Value Research, out of the 10 companies, Adani Ports and SEZ has the highest mutual fund exposure 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) as of July 2024 end.

Also read | SEBI refutes Hindenburg's claims of REIT regulation bias as "inappropriate"

In terms of active:passive mix, ACC has the smallest allocation by passive mutual funds at 0.8 percent. On the other side, Adani Wilmar has the highest investments by passive mutual funds at 100 percent.

Over the past two years, Adani group stocks have seen a constant increase in active share by mutual funds.

Out of the total of 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 by passive mutual fund schemes.

Highest mutual fund investments

Adani Ports and SEZ has the highest mutual fund participation as 111 schemes have invested a total of Rs 13,024.22 crore in the company. Out of this, the share of passive funds is at 55.9 percent at Rs 7,284.32 crore.

SBI Nifty 50 ETF has the highest invested amount in the stock (Adani Ports) at Rs 1,520.59 crore, followed by Kotak Equity Arbitrage Fund at Rs 701.90 crore and SBI Arbitrage Opportunities Fund 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 share by passive mutual fund at 0.8 percent. Out of a total of Rs 7,668.38 crore invested by 140 schemes, only 32 passive schemes had invested a total of Rs 63.47 crore at the end of July 2024.

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

Also read | Hindenburg responds to SEBI Chief Madhabi Puri Buch’s statement, raises new questions

In terms of percentage of net investments, PGIM India Arbitrage Fund had 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 investments by passive mutual funds at 100 percent, Adani Green Energy also has a high exposure by passive mutual funds 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 an investments of Rs 313.70 crore.