The domestic bourses National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) have removed Adani group flagship company Adani Enterprises from the Short-Term Additional Surveillance Measure (ST-ASM) Stage I framework, with effect from March 8, 2023. The exchanges had put the conglomerate’s stock under its ASM framework last month after a controversial report by the U.S.-based short seller Hindenburg Research triggered a sharp sell-off in Adani group stocks.
On February 3, both the BSE and NSE put Adani Enterprises, Adani Ports and Special Economic Zone, and Ambuja Cements in the surveillance framework to restrict excessive volatility in the stocks. While Ambuja Cements and Adani Ports were removed from the framework on February 13, Adani Enterprises remained under the surveillance.
The removal of the ASM framework will ease some trading restrictions, such as higher margin requirements, while dealing in shares of AEL. During stage I of ASM, traders dealing in the stocks are required to deposit a 100% margin, and these counters are subject to a 5% circuit limit.
Under the short-term ASM, the exchanges said, “Under the short-term ASM, the exchanges said, "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 March 9, 2023 on all open positions as on March 8, 2023 and new positions created from March 09, 2023."
Market regulators Securities and Exchange Board of India (SEBI) and exchanges, impose surveillance measures to enhance market integrity and safeguard the interest of investors. The regulators put in extra surveillance on securities to keep a check on price variation and volatility along with the existing pre-emptive Surveillance measure like Graded Surveillance Measure (GSM), price band, periodic call auction and transfer of securities to trade-to-trade settlement from time-to-time.
Meanwhile, eight out of 10 listed Adani group companies ended in the green, in sync with the broader market, with six stocks hitting their upper circuit. Within the Adani group, Adani Enterprises was the top performer with share price settling higher by 5.5%, extending the rally for the fifth straight session. While Adani Green, Adani Power, Adani Transmission, Adani Total Gas, Adani Wilmar, and NDTV hit their respective 5% upper circuit limits, Adani Ports & SEZ settled 0.9% higher.
Bucking the trend, newly acquired cement entities ACC and Ambuja Cements closed lower, down 1.5% and 1.65%, respectively.
Shares of Adani group companies have witnessed trend reversal in the last few days amid easing concerns about the conglomerate’s debt obligations after the Gautam Adani-led entity raised ₹15,446 crore by selling minority stakes in four of its listed firms to U.S.-based GQG Partners. The stocks regained buying momentum after losing nearly ₹12 lakh crore in market value in more than a month after Hindenburg Research released a report on January 24, making some serious allegations against the company. However, the Adani group had refuted the allegations in a detailed report.
On March 3, Australia-listed GQG Partners made investments worth ₹15,446 crore in four Adani group companies — Adani Ports and SEZ, Adani Green Energy, Adani Transmission and Adani Enterprises — through secondary market transactions. Jefferies India Private Limited acted as the sole broker for the transaction. GQG has bought 3.4% stake in Adani Enterprises for about ₹5,460 crore, 4.1% in Adani Ports for ₹5,282 crore, 2.5% in Adani Transmission for ₹1,898 crore, and a 3.5% shares in Adani Green Energy for ₹2,806 crore.
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