Foreign portfolio investors held a combined 8.8% stake in Adani Enterprises Ltd. at the end of the June quarter, marking the lowest level since 2009 when Prime Infobase began tracking the data. According to reports from Business Standard, this represents a significant decline from the peak of almost 23% in September 2023 and is now well below the stock's average foreign holding of more than 18% over the past decade. The decline reflects exits by several long-term overseas investors, including a recent stake sale by GQG Partners, the US-based investment firm that emerged as an important backer after the Hindenburg Research short-seller report in January 2023.
Domestic institutions boosted their holdings in Adani Enterprises during the June quarter to 9.3%, exceeding that of foreign funds for the first time, as reported by Prime Infobase. SBI Funds Management Ltd., the country's largest mutual fund, picked up a 1.3% stake after GQG sold shares in June and later increased its investments by subscribing to almost 15% of shares in the group's recent $1.6 billion fundraising exercise. According to Deven Choksey, managing director at DRChoksey FinServ, domestic mutual funds have been increasing their stakes, supported by strong inflows, as many businesses have moved from being cash consumers to cash generators.
The decline in foreign ownership comes after Adani companies had recouped the losses triggered by the Hindenburg report earlier this year, as reported by Business Standard. US prosecutors dropped their case against Gautam Adani in May after accusing him and others in late 2024 of a bribery scheme. Adani Enterprises shares have surged more than 40% this year, making them the best performer on India's Nifty 50 index, though they are still 24% below where they traded before the Hindenburg report. The flagship company serves as the group's business incubator, drawing heavy investment for its airports, green energy and data center projects.
According to Deven Choksey from DRChoksey FinServ, the decline in foreign ownership needs to be viewed in the broader context of foreign investors reducing their exposure to Indian equities, with foreign holdings across many large companies coming down over the past few years. As reported by Business Standard, he noted that domestic institutions are now more comfortable as many businesses have moved from being cash consumers to cash generators. The ownership data did not take into account Adani Enterprises' share sale this month, which drew foreign investors including The Capital Group, Goldman Sachs Group Inc., Vanguard Group Inc., and BlackRock Inc.
