In a big blow to the Adani Group, their stocks have fallen up to 20% in hours, wiping out $22 billion in market value. This happened after the US Securities and Exchange Commission (SEC) accused Adani executives of bribery and misleading investors. Let’s break it down in simple terms.
What Happened?
The Accusation: The SEC says Adani executives ran a $250 million bribery scheme and lied to investors.
The Reaction:
Stocks like Adani Energy and Adani Green Energy have plummeted.
A planned $600 million bond sale was canceled.
Existing bonds are now trading at very low prices.
Some mutual funds hold a lot of Adani stocks, which puts them at risk.
Top Mutual Funds by Adani Exposure:
ICICI Prudential Nifty Metal ETF – 10.58%
Mirae Asset Nifty Metal ETF – 10.58%
Quant ELSS Tax Saver Fund – 10.32%
Quant Absolute Fund – 8.72%
Additional Funds with Significant Adani Exposure:
Nippon India Nifty 500 Momentum 50 Index – 7.82%
Motilal Oswal Nifty 500 Momentum 50 ETF – 7.81%
Bandhan Nifty 500 Momentum 50 Index Fund – 7.44%
ICICI Pru Nifty 10 yr Benchmark G-Sec ETF – 7.34%
ICICI Pru Nifty Commodities ETF – 7.34%
Quant Quantamental Fund – 7.32%
Quant Active Fund – 6.20%
Tata Infrastructure Fund – 6.11%
HDFC Nifty 100 Equal Weight Index Fund – 5.87%
Sundaram Nifty 100 Equal Weight Fund – 5.78%
Motilal Oswal S&P BSE Quality ETF – 5.42%
Motilal Oswal S&P BSE Quality Index Fund – 5.37%
Quant Small Cap Fund – 5.30%
Tata Resources & Energy Fund – 5.17%
Bandhan Infrastructure Fund – 5.14%
Quant Infrastructure Fund – 5.02%
What Should You Do?
Review Your Portfolio:
Identify if you hold any of these funds. High exposure to Adani stocks could mean increased volatility.
Diversify:
If your investments are concentrated in sectoral or momentum-based funds, consider reallocating to more stable, diversified funds.
Stay Calm:
Market turbulence can be unsettling, but avoid impulsive decisions. Adani-related losses might stabilize in the future.
The Key Takeaway
Adani’s stock crash is a stark reminder of the importance of diversification and monitoring your investments. If you’re exposed to funds with high Adani stock holdings, take this opportunity to reassess your portfolio and align it with your risk tolerance.
Stay informed. Stay diversified. Stay protected.
Kapil Jain is the Director of Enrichwise Financial Services and Enrichwise Insurance Broking Services, an IIM Indore Gold Medalist in Finance and an investor for 25+ years.
For Tax Advisory, Insurance and Investments – contact +919821860804 or email planner@enrichwise.com
