Turmoil in Adani's empire prompts Nomura, SMFG to disclose fund exposures

The turmoil in Gautam Adani’s empire is spilling over to Japan, where major asset managers are stepping up disclosure over mutual funds with exposure to the group in response to jittery investors.
 

Nomura Holdings Inc.’s asset management arm released details on Tuesday about 30 of its publicly offered investment trusts that hold either stocks or bonds of Adani companies. The move followed similar steps last week by units of Sumitomo Mitsui Financial Group Inc. and Mizuho Financial Group Inc. 

“We have judged it necessary to provide information this time because volatility in the share and bond prices of the Adani group hasn’t fallen,” Nomura Asset Management Co. said in an emailed response to Bloomberg queries. 

A rout sparked by market manipulation claims wiped out more than $100 billion of the Adani group’s value before a rally in stock prices Tuesday. Concerns had grown over the conglomerate’s access to funding since US-based Hindenburg Research released a report in late January alleging market rigging and accounting fraud — claims Adani has repeatedly denied.

Nomura Asset Management published a note Friday as “reference material” explaining the situation surrounding the Adani group. Volatility in shares and bonds of Adani companies could remain high over the short term because the market is paying close attention to the group’s strategy, fund raising plans, and credit ratings in addition to further reports from Hindenburg, it said.  

“We have opted to move quickly to announce facts partly because inquiries to our call center and other channels have notably increased” since late January, said Kuniaki Matsuo, a spokesman at Sumitomo Mitsui DS Asset Management Co. Recent news over the Adani group’s alleged wrongdoings “have the potential to pour water over enthusiasm toward India so we are closely monitoring how broad the impact could become,” he said. 

The Sumitomo Mitsui DS Asset fund most exposed to the Adani group is an India bond investment trust where 3.05% is in the conglomerate’s securities, Matsuo said. Among Nomura Asset Management’s disclosure are two Indian bond funds that had a 5% effective ownership ratio in Adani assets as of Feb. 3.

Clients of Mizuho’s Asset Management One Co. have also shown interest in the Adani saga so the company found it important to disclose additional information, said spokesperson Kwiae Lee. More than 50 publicly offered investment trusts managed by the company hold some Adani assets, according to a release.