The EPFO invests up to 85% of its equity investments in ETFs tracking the Nifty 50, which Adani Enterprises added in September 2022. file | Photo credit: The Hindu
After Hindenburg Research Report Many large investors may have reconsidered their exposure to the Adani group. But a large pool of capital has continued to invest in Adani’s two stocks, including flagship Adani Enterprises, and will continue to do so at least until September this year, until its trustees meet this week to review their investments. Do not reconsider the approach.
These investments are being made by India’s largest retirement fund – Employees’ Provident Fund Organization (EPFO) – which manages old age savings of 27.73 crore formal sector employees and invests 15% of its corpus in Exchange Traded Funds (ETFs) does. NSE Nifty 50 and BSE Sensex.
Holding of Adani shares
The second largest non-banking financial institution after LIC of India that invests up to 85% of its equity investments in Nifty 50-tracking ETFs last September added Adani Enterprises and Stock maintained for another six months For the period commencing on 30 March this year.
Adani Ports and SEZ (APSEZ) has been a part of the Nifty 50 since September 2015, a month after the EPFO opened it for equity investment for the first time by deploying 5% incremental contribution received from its members in the ETF. APSEZ stock has also been retained in Nifty 50 for the next six months, along with Adani Enterprises, after the recent index review by NSE subsidiary, NSE Index.
savings at stake
Central Provident Fund Commissioner Neelam Shami Rao did not respond to a query sent in this regard. Hindu On March 23, asking about EPFO’s exposure to Adani Group shares, whether any instructions were given to its fund managers to avoid fresh investment in those shares to safeguard people’s old age savings, and Whether there has been any change in investment linked to Nifty 50 is being considered.
EPFO, which had invested Rs 1.57 lakh crore in ETFs till March 2022, is estimated to have infused Rs 38,000 crore out of the estimated Rs 2.54 lakh crore new contribution sent to EPF members during 2022-23. Accounts.
trustee oblivious
EPFO Trustees Hindu When contacted, he said he was not aware of its Adani stock exposure, but the issue may figure in the board’s two-day meeting, chaired by Union Labor and Employment Minister Bhupendra Yadav, starting Monday.
The investment income of EPFO for this year and the rate of interest to be paid to members is expected to be discussed in the board of trustees meeting. Last year, the EPF rate had come down to a 45-year low of 8.1%.
pulls back
A government official said that since it started investing in Adani Enterprises in the last six months, its exposure to the flagship stock of the beleaguered conglomerate is much lower than its accumulated exposure to APSEZ shares. EPFO had increased its equity investment to 10% of fresh inflows in September 2016 and further increased it to 15% in May 2017.
However, given the sharp fall in prices of Adani shares since January 24, Adani investments of EPFO will reduce its return on investment and the annual EPF rate paid to its members may be impacted.
As of March 24, Adani Enterprises’ stock was down over 49% from the price level at which it was included in the NSE Nifty 50, and down 58.5% from its 52-week high of ₹4,190 in December 2022. APSEZ stock is down nearly 19% since the start of 2022-23 and down 35% from its 52-week high of ₹987.8 recorded in September 2022.