India’s market regulator moved to calm investors’ fears on Saturday, saying its financial markets remained stable and continued to operate in a transparent and efficient manner, despite recent dramatic falls in Adani Group shares.
Shares in the Adani Group of companies, controlled by billionaire tycoon Gautam Adani, have fallen by $100 billion, or half their market value, since US short-seller Hindenburg Research raised allegations of stock manipulation and unsustainable debt.
“An unusual movement in share prices of a trading conglomerate has been observed during the past week,” the Securities and Exchange Board of India (SEBI) said in a statement, without naming the entity.
Adani Group denies all of Hindenburg’s allegations, but a drop in the value of its shares led it to cancel a $2.5 billion sale of Adani Enterprises shares earlier this week.
Mechanisms have been put in place to deal with excessive volatility in specific stocks, SEBI said, adding that they were automatically triggered under certain conditions of stock price volatility.
All matters relating to specific entities will be reviewed and appropriate action will be taken, the regulator added. SEBI is probing the recent fall in Adani Group shares and looking into any possible irregularities. The comments follow similar assurances from the central bank, which said the banking sector remained stable.
Shares in the group’s flagship firm steadied somewhat on Friday to close 1.4% higher after earlier plunging 35% to hit their lowest level since March 2021. The low pushed its losses to nearly $33.6 billion since last week, a 70 % decrease.
Earlier on Saturday, India’s Finance Minister TV Somanathan said the Adani matter was a “tempest in a teacup” from a macroeconomic perspective, while Finance Minister Nirmala Sitharaman said regulators were independent and would take their own action.
Meanwhile, Anand Mahindra, chairman of Mahindra Group, another of India’s largest conglomerates, tweeted on Saturday that investors should “never, ever bet against India” despite “current challenges in the business sector”.
