What happened — Economic Times broke news that nearly ₹44K worth of stock in the Adani Groups owned by 3 Mauritius based funds had been frozen by the NSDL acting upon SEBI’s directive, apparently due to lack of compliance with anti-money laundering laws.
Moment the markets opened, Adani’s stock was hit, down 15% at one point.
Unless you’ve been hiding under a rock, you’re aware that Adani Group stocks have been on an absolute tear over the past year or so — Adani Enterprises up 970%, Adani Green up 260%, Adani Power up 300%, all making CEO Gautam the second richest man in India. Now shrewd investors knew this party has gone a lil too far, but nobody expected the club to freakin explode.
ET’s details were hazy, but specifically the 3 funds did not comply with the market regulator’s revamped KYC norms which were brought in Oct 2020, and refused to offer details on employees as well as investors into the fund.
But, by mid afternoon, Adani cleared the air with a staunch rebuttal of the news, and stock pared some of its losses ending the day down only 5%. There is no confirmation from NSDL or SEBI.
Bottomline — hard to judge the “truth” without the regulators opening their mouths, but either ET becomes the dumbest publication to put its reputation on the line for some clicks, or this party has ended and it's time to go looking at other stocks down the street. In any case, volatility will persist