The Securities and Exchange Board of India (Sebi) issued a statement on Saturday to ease concerns about the ongoing volatility in the market, specifically the turbulence linked to Adani Group shares.“During the past week, unusual price movement in the stocks of a business conglomerate has been observed.
As part of its mandate, Sebi seeks to maintain orderly and efficient functioning of the market and has put in place a set of well-defined, publicly available surveillance measures (including the ASM framework) to address excessive volatility in specific stocks. This mechanism gets automatically triggered under certain conditions of price volatility in any stock,” the regulator said in a statement, without naming the conglomerate. Shares of Adani Group companies slid for the seventh straight session on Friday with the group’s combined market capitalisation seeing a drop of over $110 billion since January 24.
The stock exchanges have included Adani Enterprises, Adani Ports & SEZ and Ambuja Cements under the short-term ASM. Intraday trading in these stocks will require 100% upfront margin. The move is likely to curb speculation and short selling in these stocks. Shortlisting of securities under ASM is on account of market surveillance and does not imply an adverse action against the concerned companies.“In all specific entity-related matters, if any information comes to Sebi’s notice, then, as per extant policies, the same is examined and after due examination, appropriate action is taken,” Sebi said.
The regulator also reiterated its commitment to ensuring market integrity and to ensuring that markets continue to have the appropriate structural strength to function in an uninterrupted, transparent and efficient manner, as has been the case so far.”Sebi has consistently followed this approach on entity level issues and would continue to do so in future as well,” it said.
The Indian financial market, as represented by benchmark indices Sensex and Nifty, have demonstrated ongoing stability and continue to function in a transparent, fair and efficient manner, the regulator said.”On a longer term basis, Indian markets have been viewed positively by investors. A cross-country comparison of dollar-adjusted market returns with both peer and developed countries, during the past three years till date, places the Indian market as a positive outlier,” Sebi said.