Shares of Adani Group firms fell on April 3 after a Reuters story on a Securities Exchange Board of India (Sebi) investigation into alleged violations of laws on “related party” transactions.
The probe focuses on Adani Group transactions with at least three offshore organisations linked to Gautam Adani’s brother, Vinod Adani.
Over a 13-year period, the three offshore organisations in issue allegedly participated in various investment transactions with unlisted subsidiaries of the ports-to-power company.
According to the study, Vinod Adani is either a beneficial owner or a director of these organisations. The market regulator Sebi is looking into whether the omission to disclose these links violates laws regulating “related-party transactions.”
Adani Enterprises Ltd dropped 2.5 percent, Adani Transmission Ltd and Adani Green Energy Ltd both dropped 5%, Adani Total Gas Ltd dropped 0.7 percent, Adani Power Ltd dropped 2.2 percent, Adani Ports and SEZ dropped 1.2 percent, Adani Wilmar dropped 3.5 percent, and NDTV Ltd dropped 3.7 percent.
A proxy consulting firm, Institutional Investor Consulting Services (IiAS), has recommended Adani Total Gas (ATGL) shareholders vote no on a special resolution to amend the company’s articles of association (AoA). IiAS has claimed that the disclosure supporting the resolution lacks openness.
The proposed changes to the AoA would change certain parts of the shareholders’ agreement, allowing Total Energies Holdings (THS) and the current promoter group to change their board nomination rights based on their stakes in the company.The deadline for voting on this and two other resolutions is April 6.
Following a report by Financial Express that the Adani Group has no intentions to obtain external capital to quadruple the production capacity of its cement firms, Ambuja Cements and ACC, to 140 million t by FY28, ACC stock jumped 1.3 percent, while Ambuja Cements Ltd rose 1.6 percent. The organisation has claimed that it has sufficient internal accruals to meet this target.
The Adani Group has also come up with a plan to cut costs so that it can reach its goal of being the most profitable cement maker in the country.