Committed to ensure market integrity : SEBI on Adani share price movement

Mumbai (Maharashtra) : On February 4, market regulator Sebi stated that it had noticed unusual price movement in the shares of a conglomerate, specifically mentioning the troubled Adani group.

Sebi, the regulatory body, has stated that if any information is brought to its attention regarding a particular entity, it will be thoroughly investigated.

A statement from the Reserve Bank of India (RBI) on the Adani group crisis preceded Sebi’s statement.

Stocks of a business conglomerate experienced “unusual price movement” last week, Sebi reported.

According to the statement, “Sebi has put in place a set of well defined, publicly available surveillance measures to address excessive volatility in specific stocks as part of its mandate to maintain orderly and efficient functioning of the market.”

On February 2, the National Stock Exchange (NSE) announced that Adani Enterprises, Adani Ports, and Ambuja Cements would all be subject to the ASM framework beginning on February 3, 2023.

The Reserve Bank of India (RBI) had previously stated that the banking sector remains resilient and stable, putting an end to rumours that lenders faced risk due to their exposure to the crisis-hit Adani group.

Shares in the Adani group crashed after a research report by US-based short seller Hindenburg alleged gaps in the group’s financials, a high debt burden, and the risk of overvaluation.

The Adani group’s planned Rs 20,000 crore follow-on share sale was scrapped due to the sharp decline in share price.

Concerns were voiced as a result of a CLSA report estimating that 38 percent of the company’s total debt is held by a number of large Indian banks via fund and non-fund based exposure.

The remaining 12-13% came from lending between companies, with 37% coming from bonds/commercial papers, 11% from bank borrowing, and 0% coming from other sources.

Shortly before the RBI’s statement, India’s largest bank, State Bank of India (SBI), downplayed its exposure of Rs 27,000 crore to the Adani group, saying it amounted to less than 0.9% of the bank’s total loan book.