- Market regulators in India have tried to assure investors that the country’s market is “stable.”
- It admitted that there had been “abnormal price movements in business conglomerate stock prices” over the past week.
- Adani Group companies lost $110 billion in market capitalization amid short-selling attacks.
India’s stock market has been on a violent rollercoaster since tycoon Gautam Adani’s business empire came under siege by US short sellers.
The market crash in the Adani company’s share price has gotten so bad that even India’s market regulator stepped in on Saturday to ease investors’ concerns.
The conglomerate’s flagship Adani Enterprises was trading down 1% after falling as much as 10% on Monday. The stock has lost more than half of its market value so far this year. Adani Transmission’s share fell by 10%, while Adani Green Energy, Adani Power and Adani Total Gas fell by 5%.
As of Friday, more than $110 billion was wiped out of 10 companies associated with the Adani group. bloomberg.
Tick strains aren’t the only ones taking a hit.
Nervous investors continue to put pressure on Indian stocks — Sensex fell 0.5% and Nifty 50 fell 0.5% at 1:45pm local time today. The benchmarks Sensex and the Nifty 50 Index are down 0.5% and 1.4% so far this year.
It is not surprising that the Securities and Exchange Board of India (SEBI) said in a statement on Saturday: Method. “
Curiously, SEBI acknowledged “abnormal price movements in the stock prices of business conglomerates” over the past week, but did not directly name the companies.
Adani Group shares have been unusually volatile since US short-seller Hindenberg Research issued a scathing statement report On January 24, it claimed a “brazen stock manipulation and accounting fraud scheme” at the conglomerate.While Adani Group vigorously defended itself, Hindenburg also doubled down on initial reports.
In addition to Adani’s plight, S&P Global has downgraded the outlook for two of Adani’s companies – Adani Port and Special Economic Zone and Adani Power – from stable to negative, according to a memo seen by an insider. Moody’s did not change its rating on the Adani company in the meantime, but warned that a plunge in share prices could affect the group’s ability to raise capital in the next year or two, according to a Friday memo obtained by an insider. bottom.
The conglomerate’s flagship Adani Enterprises has already canceled a $2.5 billion secondary equity sale last Wednesday. It also shelved a $122 million bond sale. bloomberg reported on Saturday.
Impact of short-selling reports Spilled It entered the broader Indian market, raising concerns about corporate governance and debt in the country.
SEBI also tried to bolster investor confidence by saying that the Indian market was “viewed positively by investors”, but Indian equities were the best performers in Asia in 2022. Reuters Some analysts feel investors may rebalance their portfolios and prioritize other Asian markets such as China. Hong Kong’s Hang Seng Index is up 7.2% so far this year, and the Shanghai Composite Index is up 4.8%.
Adani Group did not immediately respond to Insider’s request for comment.