Behavioural biases that damage your investments!
In matters of investment, the sooner you acknowledge your mistakes, the sooner you'll find help in getting out of the soup. To break free from biases, the first step should be to identify those biases, says, Balwant Jain, Tax and Investment Expert.
Shares of Adani Group of companies plunged up to 15% in three trading sessions after a media report highlighted the National Securities Depository Ltd (NSDL) froze the accounts of three foreign funds that are among the top stakeholders in the firms. However, Adani group later said that all the accounts of its top shareholder funds were active.
Depository NSDL in an email to the group also confirmed the ‘active’ status. Following the fall in Adani shares, the market capitalisation of the group has declined by Rs 1.10 lakh crore to Rs 8.40 lakh crore on June 16 from Rs 9.50 lakh crore on June 11.
‘The fall’
With a fall of 15.73%, Adan Ports and Special Economic Zone emerged as the top loser among the six listed companies. Shares of the company closed at Rs 706.85 on June 16 against Rs 838.80 on June 11. Likewise, Adani Power, Adani Total Gas, Adani Transmission, Adani Enterprises and Adani Green Energy also dropped between 4.50%-15% during the past three trading sessions.
The six-listed companies in identical filings to the stock exchanges said the reports of NSDL freezing accounts of Albula Investment Fund, Cresta Fund and APMS Investment Fund holding shares in the group firms were “blatantly erroneous and is done to deliberately mislead the investing community”.
On June 15, BSE issued a circular carrying the clarification by NSDL to Adani Group. “We wish to inform you that the status of the demat account(s) of your shareholders may be verified from NSDL DPM (SHR) system available with your RTA and the beneficiary position details downloaded to your RTA. The current status of the demat accounts of the shareholders is available in the DPM (SHR) system. As may be verified from the said system, the status of demat accounts mentioned in your trail email are held in ‘Active’ status in NSDL system. Further, the … demat accounts are in ‘Suspended for Debit’ status,” as per the clarification.
What should investors do?
Kranthi Bathini, director of equity strategy at WealthMills Securities, said: “Investors should book profit in Adani stocks till the time the group improves corporate governance and bring more transparency. There will be more clarity needed with respect to the recent news. No doubt, prices are at the stratosphere and valuation matrics are not in favour of investors. Only traders with a high-risk appetite can consider entering these stocks.”
Independent analyst Ambareesh Baliga said it is better to stay away from Adani Group of stocks at present. However, those who have already invested in these stock can look to book some profit.
With a total net worth of $71.5 billion, Adani Group chairman Gautam Adani is the second-richest individual in the country after RIL’s chairman Mukesh Ambani ($86.50 billion).