The capital markets regulator Securities and Exchange Board of India (SEBI) said it has observed “unusual price movement in stocks of a business conglomerate” in the past week amid the Adani stocks rout.
“SEBI is committed to ensuring market integrity and to ensuring that the markets continue to have the appropriate structural strength to function in an uninterrupted, transparent and efficient manner as has been the case so far,” SEBI said in a statement today.
Adani group companies saw their share prices extend declines on Friday amid continued selling pressure as well as concern about any systemic impact from disarray triggered by a US short-seller report critical of the group’s finances.
“During the past week, unusual price movement in the stocks of a business conglomerate has been observed. As part of its mandate, SEBI seeks to maintain orderly and efficient functioning of the market and has put in place a set of well-defined, publicly available surveillance measures (including the ASM framework) to address excessive volatility in specific stocks,” SEBI said in the statement. It did not name Adani group.
“This mechanism gets automatically triggered under certain conditions of price volatility in any stock,” the regulator said.
SEBI’s statement came a day after the Reserve Bank of India (RBI) said the country’s banking system remains resilient and stable, amid concerns about the exposure of lenders to Adani group companies.
Shares of Adani group firms have lost more than half their market value, or in excess of $100 billion combined, after US short-seller Hindenburg Research raised allegations about high debt levels and use of tax havens.
The ports-to-energy conglomerate, led by Gautam Adani, one of the world’s richest men, rejected the criticism and denied wrongdoing. In a 413-page response, Adani group said the Hindenburg report was driven by “an ulterior motive” to “create a false market” to allow the US firm to make financial gains.
Adani Enterprises Ltd also called off its Rs 20,000-crore follow-on share sale a day after it was fully subscribed. Adani said the company’s board felt that “going ahead with the issue will not be morally correct” amid the market turmoil.
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