Three Adani Group companies — Adani Enterprises, Adani Ports and Ambuja Cements — have been put under the short-term additional surveillance measure (ASM) framework by the National Stock Exchange (NSE).
Trading in stocks under the short-term ASM framework will require investors to pay 100% upfront margin for intraday trading.
Applicable rate of margin shall be 50% or existing margin, whichever is higher, subject to maximum rate of margin capped at 100% with effect from February 6, 2023 on all open positions as on February 3, 2023 and new positions created from February 6, 2023, the NSE says in a circular.
The stock exchange's move aims to enhance market integrity and safeguard the interest of investors amid extreme volatility.
The selloff in Adani Group stocks continued on Thursday, wiping off $108 billion from the conglomerate's market capitalisation in a week after the U.S.-based short seller Hindenburg Research released its 106-page report.
Shares of Adani Enterprises, the group's flagship company that called off its fully subscribed follow-on public offer (FPO) in a surprise move, tanked as much as 27% to ₹1,565 apiece on the NSE. The stock has crashed 52% over the last five days.
Adani Green Energy, Adani Total Gas and Adani Transmission fell 10% each to close the day at ₹1,039, ₹1,707 and ₹1,551 on the NSE, respectively. Adani Total Gas has plunged 52% this year and Adani Green Energy has dropped 45% on a year-to-date basis.
Adani Ports and Special Economic Zone, which has fallen 44% on a year-to-date basis, saw its market cap dipping below the ₹1 lakh crore mark on Thursday. Shares of Adani Power and Ambuja Cements have plummeted 32% in 2023.
Earlier today, Bloomberg and Reuters reported Citigroup's wealth unit has stopped extending margin loans to its clients against securities of Adani Group.
Adani Group chairman Gautam Adani, who overtook Amazon founder Jeff Bezos to be the second richest person last year, has lost over $50 billion of his personal wealth due to a fall in the conglomerate's market cap.
In a video message to investors, Adani said the decision to scrap the FPO will not have any impact on the conglomerate's existing operations and future plans. "We will continue to focus on long term value creation and growth will be managed by internal accruals. Once the market stabilises, we will review our capital market strategy," the Adani Group chairman said.
"Given these extraordinary circumstances, the company's board felt that going ahead with the issue will not be morally correct. The interest of the investors is paramount and hence to insulate them from any potential financial losses, the Board has decided not to go ahead with the FPO," he added.
Adani Enterprises also plans to return the FPO proceeds to investors. "Given the unprecedented situation and the current market volatility the company aims to protect the interest of its investing community by returning the FPO proceeds and withdraws the completed transaction," the company said in a statement.
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