EPFO investments in two Adani companies continue despite rout in markets, reports ‘The Hindu’
The trustees of India’s largest retirement fund told the newspaper they were not aware of its exposure to the crisis-hit conglomerate.
The Employees’ Provident Fund Organisation, or EPFO, has continued to invest in two Adani Group companies even though shares of the conglomerate have faced a rout since January following allegations of stock manipulation levelled by US-based firm Hindenburg Research, The Hindu reported on Monday.
The EPFO, a retirement fund run by a trust under the Union labour ministry, administers the mandatory provident fund and a pension scheme of employees registered under the scheme.
The EPFO, which manages savings of 27.73 crore employees in India’s formal sector, will continue to invest in Adani Enterprises and Adani Ports and Special Economic Zone Limited till September, unless the trust decides against doing so in a two-day meeting starting on Monday, according to The Hindu.
The EPFO invests 15% of its corpus into exchange-traded funds, or ETFs, linked to Nifty 50 and the Sensex, reported The Hindu. The retirement fund body has also set aside 85% of its investment in companies into exchange-traded funds tracking Nifty 50.
Exchange-traded funds are a type of funds that follow a pre-defined set of rules to track a basket of securities that are used to raise capital in the markets.
As of March 2022, the EPFO had invested Rs 1.57 lakh crore in exchange-traded funds. The social security body made another investment of Rs 8,000 crore in the financial year 2022-’23, reported The Hindu.
It is not known what portion of these investments into exchange-traded funds have gone into Adani Enterprises and Adani Ports and Special Economic Zone Limited. However, whatever investments have been made are likely to have gone sour as shares of all companies of the ports-to-energy conglomerate have witnessed heavy losses since January 24, when the Hindenburg Research report was published.
As of March 24, the shares of Adani Enterprises were down by over 49% from the price level at which it was included in the NSE Nifty 50 in September. It was down 58.5% below its 52-week high level of Rs 4,190 in December 2022.
The Adani Ports and Special Economic Zone Limited stock has fallen about 19% since the beginning of 2022, and had tanked by 35% from its 52-week high of Rs 987.80 in September.
EPFO trustees have told The Hindu that they were not aware about the fund’s exposure to Adani stocks. The matter is likely to be on agenda at the two-day meeting of the EPFO board, according to the newspaper.
Meanwhile, the Congress on Monday said that it has posed 100 questions about the relations between Gautam Adani and Prime Minister Narendra Modi and now new queries were arising.
“The EPFO Trustees are unaware that crores of their members’ retirement savings are still being invested in 2 Adani firms,” tweeted Congress General Secretary (communications) Jairam Ramesh.
Shiv Sena MP Priyanka Chaturvedi pointed out that earlier reports had emerged about investments into Adani firms by the Life Insurance Corporation, the State Bank of India and the State Bank of India Pension Fund.
Congress leader Rahul Gandhi also tweeted on similar lines. “LIC money goes to Adani, SBI money goes to Adani, EPFO money goes to Adani,” Gandhi wrote in a tweet in Hindi. “Retirement funds are being invested in Adani companies even after the revelation on ‘Modani’? Mr Prime Minister, neither investigation, nor answers. Why are you so scared?”
In February, reports had said that the value of investments made by state insurer Life Insurance Corporation of India in the crisis-ridden Adani Group has turned negative. The Securities and Exchange Board of India is investigating the allegations pertaining to the Adani Group and has been directed by the Supreme Court to finish its probe within two months.
How LIC’s exposure to the embattled Adani Group has implications for middle-class savings