MUMBAI: Two large traders initiated large positions, potentially speculating 500 crore as of Friday’s closing on the derivatives counter of Adani Group’s flagship Adani Enterprises, around the time investment manager Rajeev Jain’s GQG Partners picked up a 3.39% stake in the company from SB Adani Family Trust.
are above the 3% per client threshold of Marketwide Position Limit (MWPL) for stocks set by the NSE, which provides data on clients’ holdings in excess of that limit on its Futures and Options (F&O) segment. It is not clear whether they are buying or selling exposure or if they are futures or options contracts.
Analysts said if these are futures or short options positions, then based on Friday’s closing rate 1,891 per share for active futures contracts (250 shares) and margin for trade of 65%, up to the outstanding value of their contracts 540 crores. The total exposure in terms of the number of shares held by both the traders is 4.39 million, which is around 7% of the 62.4 million MWPL.
The development has caught the eye of market constituents as no single trader has taken such a huge position in Adani Enterprises since January 24 despite the high volatility created by the Hindenburg Research report.
Two Adani stocks that regularly see large derivatives exposure by a client are Adani Ports and Ambuja Cements. But Adani Enterprises has not seen such exposure since at least August last year.
Of Adani’s 10 listed stocks, four are listed in the derivatives segment of NSE – Adani Enterprises, Adani Ports, ACC and Ambuja Cements.
One of the investors took a position on March 1, a day before GQG’s investment 5,460 crore in Adani Enterprises. The second investor made a huge investment on March 2, the day GQGi bought shares in a block deal on the BSE.
Stake buying has fueled counter interest, analysts said.
“It is difficult to say whether these are normal buying or hedged positions, but one thing is clear that the stake buying by GQG has led to renewed interest in Adani Enterprises counter,” said Rajesh Palvia, Head of Derivatives, Axis Securities.
Another broker who requested anonymity because he is not allowed to speak on individual stocks, estimated the positions to be worth 500 crores.
GQG Partners bought stake value 15,446 crore from SB Adani Family Trust in Adani Enterprises, Adani Ports, Adani Green Energy and Adani Transmission on March 2.
Adani Enterprises was bought on BSE, while the other three were on NSE.
70% of GQG’s total investment was acquired through secondary block deals in Adani Enterprises and Adani Ports.
The first investor, called Client 1 in NSE parlance, invested up to 3.06% of the total position limit of 62.4 million shares on March 1. On March 2, when GQG bought the stake, another investor introduced an exposure of 3.97% of the total position limit.
As of March 2 – data for March 3 had not been updated on the NSE till Sunday evening press time – Client 1 held 3.97% or 9,900 lots, and Client 2 held 3.06% or 7,639 lots.
Interestingly, the price of Adani Enterprises declined 66% in five sessions Close to 1,131 on February 27 1879.5 on 3 March. A day after GQG bought the stake, Adani Enterprises jumped 18%.
There are 54 stocks where one or more clients hold more than 3% of the total position limit on NSE.
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