Retail Investors Best Adani Stocks Ahead of US Bribery Allegations: India’s retail investors increased their stakes in Adani Group companies in the months before US authorities charged founder Gautam Adani with bribery, even as institutional investors reduced their exposure. According to Bloomberg data, retail holdings rose across eight of the group’s ten listed firms between December 2022 and September 2024, leaving these investors vulnerable to last week’s $30 billion selloff following the charges, which the Adani Group denies.
Retail interest surged after Adani shares plummeted due to the Hindenburg Research report in January 2023, with investors capitalizing on a subsequent rally. The rebound, which nearly erased the $150 billion loss in market value, peaked just before India’s May 2024 general elections. Adani’s presence in critical sectors like ports, airports, and power generation made its stocks appealing to retail investors as proxies for economic growth, according to Abhay Agarwal of Piper Serica Advisors Ltd.
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In contrast, institutional investors largely avoided Adani firms due to ongoing governance concerns. While foreign funds reduced their stakes in most Adani companies, they increased holdings in Adani Ports and Special Economic Zone Ltd., a Nifty 50 member. Domestic mutual funds, among the top buyers of Indian equities this year, maintained minimal exposure to Adani—a cautious strategy that shielded them from the recent turmoil.
The group’s volatile stock performance highlights a divide between risk-taking retail investors and risk-averse institutional players. The former see growth opportunities, while the latter are wary of governance and compliance risks.
