Elara India Opportunities Fund , one of the four Mauritius-based funds that hold shares predominantly in Adani Group firms is a promoter entity in a defence company that has a Rs 590-crore contract with the Union government, the Indian Express reported.
Elara IOF is a venture capital fund managed by Elara Capital. Bengaluru-based Alpha Design Technologies Private Limited (ADTPL), incorporated in 2003, works closely with the Indian Space Research Organisation and Defence Research and Development Organisation. It was reportedly acquired by the Adani Group in 2019. But the Indian Express report says, Elara is a co-owner along with the Adani Group.
In its January 24 report, among other allegations, US-based short seller Hindenburg Research said that three funds, including Elara, engaged in circuitous trading and market manipulation of the Adani group stocks, the Morning Context reported.
Another report by the news outlet in 2021 had said that 97% of Elara IOF’s net worth comes from Adani companies. The Indian Express noted that even after significantly reducing its share over the last three years, its holdings in three Adani firms add up to over Rs 9,000 crore or over 96% of its total corpus in December 2022.
As of December 31, 2022, Elara IOF holds 1.6% of Adani Enterprises, 3.62% of Adani Transmission, and 1.62% of Adani Total, the IE report said. According to a CARE Ratings press release in January 2021, ADTPL is a subsidiary of Adani Defence.
A spokesperson of the Adani Group told the daily that the largest promoter in ADTPL is Vasaka Promoters & Developers. However, the records cited by the Indian Express reveal that Adani Group and Elara together own a majority stake (51.65%) in the Bengaluru-based company.
“In 2017, Adani Defence was looking for companies which can provide both defence electronics as well as aero-structures capabilities in India. Alpha Design Technologies had capabilities across both electronics as well as aerostructures.”
However, the newspaper, citing Registrar of Companies records, said that Elara IOF bought a 44.3% stake in Vasaka for Rs 40 crore, and became the single largest shareholder on November 5, 2018. “Elara IOF also bought 0.53% directly in ADTPL for Rs 7.62 crore on December 1, 2018. In effect, Elara IOF holds almost 26% (25.65%) in ADTPL,” the report said. On December 13, 2018, Adani Defence invested Rs 400 crore to acquire 26% of ADTPL. “This valued the company at about Rs 1,538 crore. Thus, Adani and Elara together own 51.65%, i.e., a majority stake in ADTPL,” it added.
Later, the company made Adani Defence a promoter along with Vasaka – in which Elara IOF is the single largest shareholder with 44.3% stake – and Colonel H.S. Shankar. Vasaka Promoters and Developers was incorporated in 1995 and in 2006. Its shareholding has changed since then Murugappan and M. Subramaniam have been the company’s shareholders since the beginning.