Bottom-fishing in troubled waters! Mutual funds raise stake in these 5 Adani stocks

NEW DELHI: Although mutual funds were net sellers in Adani stocks in February, money managers ended up making contra bets in five out of 10 counters belonging to the crisis-hit conglomerate.

Amid a massive sell-off in Adani stocks sparked by allegations made in the explosive Hindenburg report, mutual funds picked up shares of ACC, Adani Green Energy, Adani Power, Adani Transmission and Adani Wilmar at lower prices, shows data compiled from ACE MF.

MFs, which also include passive funds, picked up 30,744 shares of Adani Green Energy during the month. The stock, which ended 5% higher at Rs 740.95 on Wednesday, is still trading 76% lower from its 52-week high level of Rs 3,048.


Shares of Adani Power, which have more than halved from 52-week high levels, also saw buying of 16,731 shares by MFs. Similarly, fund managers also bought the dip in Adani Transmission which is down over 78% from peak.

In all these 3 stocks, the total number of mutual fund schemes owning the counter also increased by one each. Adani Wilmar, which saw buying of over 9,000 shares by fund houses, also saw an increase in mutual fund ownership. The number of mutual fund schemes owning the stock rose from 13 to 15.

In the case of ACC, although the total MF ownership saw an increase, the number of mutual fund schemes owing the stock decreased by 5 to 135.

On the other hand, mutual funds were seen paring stakes in Adani Enterprises, Adani Ports, Adani Total Gas and Ambuja Cements amid the rout.

Ambuja Cements saw PPFAS, SBI, Motilal Oswal, Tata and Quant reducing stake while Kotak went the opposite way. Adani Ports had Aditya Birla SunLife, IDFC, Edelweiss, SBI, Tata and Quant mutual funds reducing their holdings.

Released in late January, the Hindenburg report has triggered a Rs 10 lakh crore wipeout in Adani stocks with its combined market capitalisation reducing to half.

Embattled billionaire Gautam Adani has been trying hard to rebuild investor confidence by prepaying loans and selling stakes to GQG Partners.

Adani Ports, which is the Group's cash cow, has coverage from 21 analysts and all of them recommend a buy. Most other Adani stocks have little coverage from brokerages.

Jefferies analyst Lavina Quadros said once investors look beyond the group issues and train focus back to fundamentals, Adani Ports stock can rally up to Rs 800. "Operationally, Adani Ports is continuing to move from strength to strength, with 22% market share from 14% in FY15 and should be 29% by FY25E," the equity analyst said.

(With data inputs from Ritesh Presswala)

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