Mutual funds BIG bet on Adani shares! LIC also bought…, but why are foreign investors selling stake in Gautam Adani’s companies?

While mutual funds and LIC prefer investing in Adani shares, many foreign players seem to be treading carefully.

The Gautam Adani-led Adani Group, India’s third-largest business, saw significant changes in shareholding patterns across its 10 listed companies during the June quarter. While mutual funds and LIC increased their stake in several Adani companies, foreign investors’ response was very less.

Mutual Funds Investment In Adani Shares

Indian mutual funds have been actively investing in Adani Group stocks. During the June quarter, mutual funds picked up shares in seven out of ten Adani Group companies. However, foreign institutional investors (FIIs) reduced their holdings.

• Adani Energy Solutions: Mutual fund stake rose by 74 basis points, from 2.45% in March to 3.19% in June.
  
• Adani Green Energy: Stake up by 50 basis points to 1.51%.
  
• Adani Ports: Holding increased by 40 basis points to 5.42%.
  
• Adani Enterprises: Up 18 basis points to 2.67%.
  
• Adani Power: Increased by 12 basis points to 1.76%.
  
• Ambuja Cements: Up 10 basis points to 7.91%.
  

However, mutual funds reduced their stake in ACC by 222 basis points, bringing it down to 12.07%.

LIC Investment In Adani Shares

LIC, India’s largest insurer was also buying on the Adani Group’s cement businesses:

• ACC: Increased stake by 142 basis points to 9.11%.
  
• Ambuja Cements: Stake rose 125 basis points to 6.80%.
  
• Adani Green Energy: LIC trimmed its holding slightly by 4 basis points to 1.32%.
  

No changes were reported in LIC’s holdings in other Adani companies during the quarter.

GQG Partners Reduces Exposure

GQG Partners, the investment firm led by NRI Rajiv Jain cut its holdings:

• Adani Green Energy: Stake dropped 13 basis points to 4.36%.
  
• Adani Power: Decreased by 4 basis points to 5.06%.
  
• Ambuja Cements: GQG’s name is no longer on the shareholder list; it either sold its entire stake or reduced it below 1%.
  

However, GQG maintained its holdings in:

• Adani Energy Solutions at 5.23%
  
• Adani Enterprises at 3.84%
  
• It even increased its stake in Adani Ports by 3 basis points to 3.96%
  

GQG had famously invested in Adani stocks after the Hindenburg report-triggered selloff, positioning itself as a strong backer during the crisis.

FIIs Sell Stake In Adani

Foreign institutional investors reduced their stake in eight out of ten Adani companies:

• Adani Energy Solutions: Down 173 basis points to 15.85%
  
• Ambuja Cements: Down 117 basis points to 7.43%
  
• Adani Green Energy: Down 87 basis points to 11.58%
  

Declines were also seen in Adani Total Gas, ACC, and Adani Enterprises

FII Increased Stake

• Adani Ports: FIIs increased holdings by 10 basis points to 13.53%
  
• Adani Power: Also up 10 basis points to 12.46%
  

The contrasting approach of domestic and foreign investors indicates diverging outlooks. Indian investors seem more optimistic about a rebound in Adani stocks, while foreign investors remain cautious due to profit-booking, geopolitical uncertainty and lower earnings growth in Indian markets.

<!–

–>