Quant mutual fund (MF) would possibly facing the most significant impact among mutual fund houses due to the recent decline in Adani group shares on Thursday. With assets worth over Rs 1 lakh crore under management, Quant MF had the highest exposure to the Adani Group stocks compared to other larger fund houses.
According to Prime Database, as of the end of October, Quant MF held almost Rs 5,000 crore worth of Adani group stocks based on the stock prices from October 31.
Last month, Quant MF was the primary investor in Adani Enterprises' Rs 4,200 crore qualified institutional placement (QIP), acquiring nearly half of the shares at Rs 2,962 apiece. Since then, the stock has decreased by 27%, closing at Rs 2,160 on Thursday.
In 2023, Quant MF held the largest stake in Adani shares during the Hindenburg issue. Following the crisis, the fund house divested from all Adani stocks, though many of its investments had yielded profits during the previous incident.
As of October 31, 2024, the mutual fund industry in India had a combined value of Rs 43,455 crore invested in 10 listed companies belonging to the Adani Group. This marks an increase from the Rs 41,814 crore that mutual funds held in these companies in July of the same year.
In September, mutual funds increased their holdings in Adani Enterprises by 46 lakh shares, bringing the total from 2.5 crores to 2.96 crores. The buying was led by Quant Mutual Fund, which added 66.61 lakh shares. On the other hand, Invesco Mutual Fund reduced its position by selling 7.57 lakh shares.
As of October 31, the top three fund houses, including ICICI Prudential MF, HDFC MF, and SBI MF, each had approximately Rs 2,500 crore invested in Adani group stocks through their active equity schemes. Additionally, Mirae Asset, Tata, and Aditya Birla Sun Life also had exposure to these shares, with over Rs 1,000 crore invested by each of these fund houses.
On November 21, the market capitalisation of Adani Group's publicly traded companies saw a collective decrease of Rs 2.2 lakh crore. This decline was a result of their stocks falling by up to 20 percent after US prosecutors alleged Adani and other top executives of involvement in a bribery scheme worth over $250 million in connection to securing solar energy contracts with state government officials.
Six out of 10 Adani stocks listed on the market experienced a slight recovery towards the end of trading, yet remained in negative territory. NDTV shares, which had initially dropped 14.38% to reach a low of Rs 145, saw the most significant rebound as the session drew to a close. At last check, NDTV's stock was trading 3.75% lower at Rs 163.
Meanwhile, ACC, a cement company, was down 6.82% at Rs 2,036, after falling 14.54% earlier in the day to hit a low of Rs 1,867.15. Ambuja Cements also managed to curb its losses, trading down 11.51% at Rs 486.35, after dropping 17.60% in early trading to reach a low of Rs 452.90.
Adani Ports and Special Economic Zone Ltd experienced a significant decrease of 22.90% but later recovered slightly to trade at a 13.54% decrease at Rs 1,114.55.
Similarly, Adani Total Gas Ltd saw a drop of 18.15% before bouncing back slightly to be trading at a 11.49% decrease at Rs 595. Adani Power, which faced a decrease of 17.79%, was trading at a 9.42% decrease at Rs 474.75.
In contrast, Adani Energy Solutions, Adani Green Energy, Adani Wilmar, and Adani Enterprises did not see much improvement, with their shares trading down by as much as 24%.
Information on the decrease in market value of mutual fund holdings will be released on November 22.