INVESTORS FRET OVER LITTLE-KNOWN FUNDS

Confusion over three Mauritius-based funds that whipsawed shares of Adani Group companies this week has underscored a deeper risk for investors in such stocks owned by opaque entities.

"It is important for investors and the regulator to be aware of the ownership in listed companies, especially when they originate from tax havens like Mauritius," said Hemindra Hazari, an independent research analyst in Mumbai. "The names of the funds are not very well known in the capital market and they have high concentration into a select number of stocks, which in itself is unusual."

Even as a massive share rally in the companies of the conglomerate has this year more than doubled the net worth of Adani to

$73 billion, this week's events have pointed to a deeper pain point: opacity around the group and its key non-founder shareholders. There's also scant analyst coverage for Adani companies, highlighting the information lacunae could be a chronic issue.

"It is extremely crucial for the Adani Group to disclose relevant details regarding ultimate beneficial ownership of foreign portfolio investors,” said Zulfiquar Memon, managing partner of Mumbai-based law firm MZM Legal LLP.

Some of the group's listed stocks have soared more than six-fold in value since the start of

2020 on bets Adani's push into infrastructure will pay off as the economy revives. Adding to the tailwind was MSCI Inc including three more Adani stocks to its India benchmark index, taking the total to five.—