As Adani Group stocks lost ~Rs 10 lakh crore ($121 billion) of their market capitalisation in nearly two weeks, triggered triggered The Ken The domino effect of Adani stocks’ US$51B meltdown Read more by short-seller Hindenburg Research’s critical report, many eyes fell upon the mutual funds (MFs) that held them. The total exposure stood at Rs 26,300 crore ($3.2 billion) by the end of 2022.
While most funds had kept their distance from the conglomerate owned by Indian billionaire Gautam Adani, a few names stood out for the extent of their holdings.
On the list is the year-and-a-half-old NJ Mutual Fund, holding Rs 319 crore ($38.5 million) in Adani stocks. The exposure was ~7% of its assets under management (AUM) of ~Rs 4,500 crore (~$545 million) as of December.
NJ, like other “quant” houses, relies more on analysing quantitative data and mathematical models instead of conducting an examination of a company’s fundamentals, an approach used by a majority of Indian fund houses.
Only Quant Mutual Fund, with a similar quant-based investment strategy, has a bigger exposure to Adani stocks. As of December, more than 10% of its AUM was invested in the groups’ companies, according to data from markets-information provider Trendlyne. But its founder Sandeep Tandon has reportedly reportedly Moneycontrol Quant Mutual founder indicates reduced exposure to Adani group companies Read more hinted at a reduced exposure.
Now, unlike Quant—often in the news for its high returns and rapid AUM growth until recently—‘NJ’ may not ring a bell for many. But in India’s MF bazaar worth ~Rs 41 lakh crore ($495 billion), these initials are invariably met with a knowing, respectful nod. They represent Neeraj Choksi and Jignesh Desai, founders of Surat-based NJ IndiaInvest, the country’s largest MF distributor by income.
“They have been in MF distribution for more than 25 years, and are respected, sharp minds,” said Anil Ghelani, head of passive investments and products, DSP Mutual Fund. Kaustubh Belapurkar, director (fund research), Morningstar Investment Adviser India, seconded this and said that NJ has built a “phenomenal” business with its wide network.
The numbers bear this out. The ‘ Commission Disclosure Commission Disclosure AMFI Commission Disclosure Read more ’ section on the website of Association of Mutual Funds in India (AMFI)—the industry body of fund houses—shows that NJ IndiaInvest’s commission income rose ~11X from Rs 114 crore (~$14 million) in the year ended March 2012 to Rs 1,300 crore (~$157 million) in the year ended March 2022.
