The market regulator said steps are being taken to deal with excessive volatility in specific stocks. Sebi said in a statement without naming the Adani group that shares of a business group have experienced abnormal volatility in the past week.
Sebi said on Saturday that he is committed to ensuring fairness, efficiency and maintaining strong stock market fundamentals, as well as ensuring all necessary follow-up amid growing controversy over Adani Group’s stock plunge. The market regulator said steps are being taken to deal with excessive volatility in specific stocks. Sebi said in a statement without naming the Adani group that shares of a business group have experienced abnormal volatility in the past week.
The officials confirmed that the statement was issued in the wake of the Adani case. Shares of Adani’s companies fell sharply after US-based ‘short seller’ Hindenburg Research accused the Gautam Adani-led group of fraudulent transactions and stock price manipulation. Adani Group has denied these allegations as false and has said that it has complied with all applicable laws and regulatory disclosures. However, despite this, the market capitalization of 10 Adani Group listed companies has decreased by a total of Rs 8.5 lakh crore. The fall occurred in six trading sessions.
Adani Enterprises also canceled its Rs 20,000 crore follow-on public offering (FPO). The Securities and Exchange Board of India (SEBI) said in the statement that as part of its responsibility, SEBI seeks to maintain the orderly and efficient functioning of the market. Well-defined and publicly available monitoring measures (including the ASM framework) are put in place to deal with extreme volatility in a particular stock.
According to the statement, this system is activated automatically under certain conditions when there is a fluctuation in the prices of any share. The stock exchanges – BSE and NSE have placed three Adani Group companies – Adani Enterprises, Adani Ports and Special Economic Zone and Ambuja Cements – under their short-term Additional Monitoring Measures (ASM). This means that an initial margin of 100 percent will be applied for intraday trading, to prevent speculation and ‘short selling’ on these shares.
SEBI said that after all specific cases are brought to it, the regulator examines them in accordance with existing policies and takes appropriate action. Several opposition leaders and some experts have questioned SEBI for not acting on the Adani issue. Parliament proceedings were also interrupted for two days on this issue. Some politicians have also written letters to SEBI and the government to investigate the matter. Opposition parties are also demanding an investigation by the Joint Parliamentary Committee. However, the regulator did not clearly indicate whether it was conducting any investigation into the matter.
Disclaimer:Prabhasakshi has not edited this news. This news has been published from PTI-language feed.