Acquisition comes amid sell-off by Mauritius-based funds
Promoter stakes in 4 Adani Group firms are already near the regulatory maximum of 75% forpublic companies
A Mauritius-based promoter entity has acquired about 5% of equity shares in recent months in Adani Green Energy, indicating a doubling down on the renewables bet by group chairman Gautam Adani. The purchase of shares by Infinite Trade and Investments Ltd has taken the promoter shareholding in the company from 56.29% as of March to 60.14% in November. Adani Green Energy currently has a market capitalization of ₹2.14 trillion.
Separately, nine Mauritius-based funds, six of whom dominate most of the public float in listed Adani group companies, have pared their holdings in Adani Green.
This is a departure from the historic pattern of trading by the aforementioned six funds, which rarely sell Adani group shares. Public float refers to the portion of a company’s equity shares that are available to public investors, as distinct from promoters, or other locked-in investors such as governments.
“Adani Green Energy, by way of various disclosures made by Infinite Trade and Investment Limited, was informed that Infinite had acquired 1.36% shares in Q1FY22 by way of promoter inter-se transfer and thereafter has been acquiring shares from the open market (i.e., 1.18% in Q1FY22, 2.67% in Q2FY22 and 0.66% Q3FY22), after complying with all the statutory requirements and requisite disclosures," a spokesperson for Adani Green Energy said.
It’s unclear if the sale of shares by the Mauritius-based funds enabled Infinite Trade to acquire more of Adani Green.
“Please note that the share transaction system in the open market doesn’t have any mechanism which enables the Company to check any relationship between the Buyer and Seller," the spokesperson said, adding that it was beyond the company’s purview to comment on specific investors.
According to BSE and Trendlyne data analysed by Mint, in the first quarter of FY22, Adani Green had nine foreign funds, each holding more than 1% of the company. The total foreign shareholding stood at 21.47%. By the end of the September quarter, the number of foreign funds with holdings above 1% reduced to just three, and the total foreign investor holding dropped to 17.83%.
Only three funds held more than 1% at the end of September, and even they reduced their stakes. The three are Asia Investment (1.69%), Elara India Opportunities owns (1.67%) and APMS Investment (1.65%). The six other funds could be holding anywhere between 0% and 0.99% shares of Adani Green, as any holding below 1% is not part of a public filing.
Infinite Trade started appearing as a promoter entity of Adani Green on 6 May 2021, with a 1.37% stake, as per the substantial acquisition and shares takeovers (SAST) disclosures.
This entity started investing in a significant way post-June when scrutiny over the foreign shareholders in the Adani group companies intensified. Between 11 and 20 June, Infinite Trade acquired 8.5 million shares of Adani Green and 1.93 million shares of Adani Ports and SEZ, where promoter holding was 63.74%.
Infinite Trade, the Mauritius-based promoter entity, now owns 5.44% of equity in Adani Green. The acquisition of more than 5% of equity shares within a fiscal year in a company by entities (or persons acting in concert) that already own between 25% and 75% of a company’s equity shares will trigger an obligation to make an open offer for the purchase of share from other shareholders, according to Indian laws. But inter-se promoter transfers, or transfers between promoter companies, are exempt from this requirement. Besides, public records with identity search service Legal Entity Identifier (LIE) indicate Infinite Trade was registered on 29 March 2021, which means some of the shareholding could have been acquired during the previous fiscal.
The shareholdings by the six Mauritius-based funds in the other four Adani companies that they hold—Adani Transmissions, Adani Power, Adani Total Gas and Adani Enterprises—haven’t recorded any change.
Promoter stakes in these companies are already near the regulatory maximum of 75% for public companies.
The six Mauritius-based funds that have holdings in Adani Green as well as other listed group firms are Asia Investment Corporation (Mauritius) Ltd, APMS Investment Fund Ltd, Elara India Opportunities Fund Ltd, LTS Investment Fund Ltd, Vespera Fund Ltd and Albula Investment Fund Ltd.
Shares of Adani group companies have seen a dizzying bull run during the pandemic, helping promoter Gautam Adani’s net worth rise to within spitting distance of Asia’s richest man, Mukesh Ambani. On some days in recent weeks, Adani’s wealth had surpassed Ambani’s depending on share price movements. The market value of Adani group companies has surged 19-fold over as many months.
Boosting its shareholding in Adani Green and Adani Ports will make it easier for the group to raise funds and put a lid on the controversy related to little-known Mauritius-based funds cornering a substantial part of the group companies’ public float. In June, the controversy about its shareholdings saw Adani Group companies lose ₹1 trillion in market value within days.
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