Sebi, the market regulator, is investigating into market charges against Adani Group, whose nine publicly traded firms experienced a market capitalization decrease of 60% between January 24 and March 1, according to information provided to Parliament on Monday.
Pankaj Chaudhary, a Minister of State for Finance, stated in the Lok Sabha that the stock volatility of these companies has not significantly affected the systemic level. During the same time, the Nifty 50 fell by almost 4.5%.
As the statutory overseer of the securities markets, the Securities and Exchange Board of India (Sebi) is tasked with developing regulatory frameworks to ensure the security markets’ development and stability, including investor protection.
As per its mandate, it conducts investigations into any alleged violations of its regulations by any market entity, he said. “It is, accordingly, undertaking investigation into the market allegations against the Adani Group of companies. The nine listed companies forming part of Adani Group witnessed a decline of around 60 per cent of market capitalisation from January 24, 2023 till March 1, 2023 subsequent to the report published by Hindenburg Research,” Chaudhary said.
In January, a US-based short seller called Hindenburg Research accused the Adani Group of engaging in dishonest business dealings and manipulating stock prices. As a result, shares of group firms fell sharply. The company has denied the accusations and said that it complies with all legal and disclosure standards.
According to Chaudhary, the Reserve Bank of India permits banks to make credit-related choices based on internal evaluations of the loan’s commercial viability as long as they do so in accordance with board-approved policies and the prudential requirements of the RBI.
“The volatility in the stocks of these companies have not had any significant impact at the systemic level. Nifty 50 declined by around 2.9 per cent in the month of January 2023 and by around 4.9 per cent in the 2-month period of January and February 2023,” the minister said.
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