RBI,SEBI,and NSE Actions after Adani Row

February 3, 2023

After the Hindenburg report, Gautham Adani who was the second richest person in the world slipped to the 21^st position according to the Bloomberg Billionaires Index. In the last ten days, he lost 108 billion USD. Hindenburg alleged Adani of stock manipulation. With global scrutiny, the stock prices of the company are to fall down further.

Current Scenario

Adani withdrew his FPO recently. FPO is Follow-On Public Offering. It is the stock a company gives its investors after the IPO, Initial Public Offers. FPO are additional stocks and are called secondary offerings.

RBI actions

RBI has asked for details from the banks associated with the Adani group. This includes collateral details Mr. Adani and his cousins used to get a loan.

Actions of NSE

NSE put the Adani group under “Additional Surveillance Mechanism”. It means the stock has seen unusual activity and is not safe to purchase the share. This was introduced in 2018. The stocks put under the ASM category are determined by SEBI. The stocks are put under ASM based on the following factors:

High – Low Variation
Delivery PERcentage
Close-to-close price variation
Client concentration
PE
Number of Unique PANs
Market Capitalisation
Volume Variation

The main objective of the ASM mechanism is to protect investors.

SEBI actions

SEBI is now examining the issue and is preparing a report. It is also looking into the fraudulent dealings made by the Adani Group as mentioned in the Hindenburg report.

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