- Date : 01/09/2023
- Read: 3 mins
Interested in understanding the aftermath of Adani Group's 35,000 Cr market cap drop due to investigative findings? Read this article to get insights for managing portfolios.
Many investors lost a lot of money when Adani Group’s stocks dropped 3-4% after a report exposed their secret funds in Mauritius. The report also claimed that the group had shady connections to shell companies and tax havens. The group denied the claims and said they were old and settled. But they lost Rs 35,000 crores in market cap in a day. How will this impact your portfolio? And how can you protect your wealth from such shocks? Keep reading to learn more.
Highlights:
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Adani Group stocks drop 3-4%
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Shady connections to shell companies
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Group denies claims, says old and settled
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Lost Rs 35,000 crores in market cap
Also Read: Adani Effect: What You Need to Know About Mutual Fund Investments
Investors should avoid taking short-term positions in the group's stocks to avoid short-term volatility. They should also spread their investments across different sectors and companies to minimise risk. The Adani Group is under scrutiny for alleged financial misconduct and stock manipulation. The group has refuted the allegations and said that they have been vindicated by the authorities. However, the SEBI probe and the Supreme Court hearing are still ongoing and could affect the group’s image and value.
Allegations against the Adani Group
The report reveals how the Adani family used Mauritius' funds to trade secretly their own shares and make profits. A company owned by Vinod Adani also got paid for giving investment advice. Two members who have close ties with the Adani family also acted as directors and shareholders of the Adani company. They used offshore structures to buy and sell Adani Group stocks for years and earn profits.
The Adani Group dismissed the OCCRP claims as old and settled. It said the DRI had probed the same allegations a decade ago and found no evidence of over-invoicing, illegal transfer of funds, related party transactions or investments through FPIs. It said the Supreme Court of India had also cleared it of any wrongdoing in March.
Is SEBI (the regulatory watchdog in India) doing something?
SEBI has finished its probe into Adani Group’s alleged stock manipulation. It has recommended action in some cases and submitted its status report to the Supreme Court. The report covers 24 investigations into various aspects of the group’s activities. Out of these, 22 have been concluded and one is an interim. The hearing in the Supreme Court, which was supposed to take place on August 29, was postponed. A new date is yet to be announced. SEBI probed 13 overseas entities that held Adani stock in 2020 for possible proxy ownership.
Also Read: Investors Flocking to Adani Group Stocks - Is It Too Late to Get In?
Disclaimer: This article is intended for general information purposes only and should not be construed as investment or tax advice.
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