The Hindenburg Report is related to Adani Group. This group has less than one percent share in the overall AUM of mutual fund industry. A fall in the prices of Adani Group stocks, may have miniscule impact at NAVs of mutual fund schemes.
As on 31st July 2024, the Asset Under Management (AUM) of the mutual fund industry was at Rs. 64,70,664 Crore. Out of these, only Rs. 41814 Crore are invested into 10 companies of Adani Group. This is just 0.64 percent of the total AUM.
Even if the price of Adani Group stocks crashes by 50 percent, the mutual fund investors need not to worry. It’s primarily due to two reasons: the balance sheet of Adani Group companies are not going to change overnight and even if the price of Adani Group shares crash, there are plenty of buyers in the market for these stocks. Besides this, the holding of Adani Group stocks is not concentrated into some schemes, but these are distributed over numerous schemes.
It will be a pleasant surprise for the mutual fund investors that Adani Enterprises is not the first choice of fund managers. Out of the 10 Adani Group companies, Adani Ports and SEZ has the highest mutual fund exposure of more than Rs. 13000 Crore, followed by Ambuja Cement, ACC and Adani Enterprises. Mutual fund schemes have an exposure of around Rs 9000 crore in Ambuja Cement, around Rs 7600 Crore in ACC and Rs. 7200 Crore in Adani Enterprises.
In last two years active mutual fund schemes have been increasing their share in Adani Group Companies. Out of total investment of Rs 41,813 Crore by mutual funds in Adani Group Companies Rs. 11777 Crore is into passive funds and balance into active funds. In an Active Fund, the fund manager is active in deciding the buy/sell of underlying securities whereas in a passive fund, the stock is bought or sold in order to replicate a benchmark or Index.
