The capital markets regulator Securities and Exchange Board of India (SEBI) said that it has observed “unusual price movement in stocks of a business conglomerate” in the past week. The regulator also assured that committed to ensuring market integrity and structural strength.
Notably, SEBI’s statement comes amid the controversy surrounding the Hindenburg report on Adani Group. US short-seller Hindenburg Research, which makes money by betting on shares falling, accused the Adani Group of improper use of tax havens and stock manipulation, while also raising concerns over high debt levels.
“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 without naming Adani group.
SEBI assured that it 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.
“This mechanism gets automatically triggered under certain conditions of price volatility in any stock,” the regulator said.
Nirmala Sitharaman reacts to Adani-Hindenburg row
Earlier in the day, Union Finance Minister Nirmala Sitharaman reacted to the Adani-Hindenburg row and said that the regulators should act on time and act to keep the markets stable. Sitharaman made the remark when asked if the Hindenburg report was a conspiracy.
“The regulators should always be on their toes,” Nirmala Sitharaman said while speaking exclusively to Times Now’s Navika Kumar.
She also said that regulators are independent of the government… and they are left to themselves to do what is appropriate for keeping the markets regulated in prime condition. The SEBI (Securities and Exchange Board of India) has the wherewithal to keep that prime condition intact.
RBI says all is well
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. The RBI said it remains vigilant and continues to monitor the stability of the Indian banking sector.
Adani Enterprises Ltd. abruptly decided to withdraw its FPO worth ₹20,000 crore on Wednesday evening. After the report was released, the total market cap of Adani Group slipped 47.44% to reach Rs10,07,999 crore from Rs 19,18,056 crore on January 24. Gautam Adani has also been moved out of the top 20 richest people’s list after the share price falls on February 3 is considered.
On January 30, billionaire Gautam Adani-led group Adani Enterprises came forward and responded to the Hindenburg Research report allegations. The 413 pages response called Hindenburg’s allegations nothing but a lie. Adani’s response goes on to add that the report has been released to “create a false market,” one that would allow the US-based firm to make financial gains.
